GAZA - Israel and Hamas still differ on terms for a ceasefire that Egypt is mediating, a Palestinian official familiar with the talks said yesterday.

Egypt issued a statement on Tuesday saying Israel had agreed to the terms of the truce as presented to them by Egyptian mediators.

The official said Israel agreed to stop ground raids and air strikes in the Hamas-ruled Gaza Strip if militants halted rocket attacks, but had not accepted the group's demands to reopen the territory's border crossings as soon as a ceasefire begins.

"Israel offered calm for calm, and said it would assess the situation and alleviate the blockade as calm prevails," said the official, who declined to be identified.

He said Egypt would inform Israel of Hamas' response after mediators had met officials from the group, scheduled for yesterday.

Egypt has been trying to broker a truce to end violence that could derail US-backed peace negotiations between Israeli Prime Minister Ehud Olmert and Palestinian President Mahmoud Abbas.

Hamas, which won control of the Gaza Strip last June, has offered a six-month halt to hostilities in the territory in return for an end to Israeli raids and the reopening of the border crossings. In the latest violence in the Gaza Strip, an Israeli aircraft fired a missile at a car carrying a Hamas mortar crew.

The crew exited the vehicle before the projectile hit and were unhurt, but five passersby were wounded, medical workers said.

Israel has also said a deal with Hamas must address the issue of a captive Israeli soldier. Hamas has said a truce agreement and the release of Gilad Shalit, held by Gaza militants since 2006, should remain separate issues.

Arye Mekel, Israel's foreign ministry spokesman, refused to comment on the talks. - Reuters