Israel and the Hamas militant group are edging closer to a ceasefire to end the week-long Israeli offensive in the Gaza Strip, but a deal remains elusive after a day of furious diplomatic efforts.

Israeli tanks and gunboats pummelled targets in Gaza in what appeared to be a last-minute burst of fire on Tuesday, while at least 200 rockets were fired into Israel.

As talks dragged on near midnight, Israeli and Hamas officials, communicating through Egyptian mediators, expressed hope that a deal would soon be reached, but warned that it was far from certain.

"If there is a possibility of achieving a long-term solution to this problem by diplomatic means, we prefer that. But if not, then I am sure you will understand that Israel will have to take whatever actions are necessary to defend its people," Israeli prime minister Benjamin Netanyahu said at a late-night meeting with visiting US secretary of state Hillary Clinton.

Mrs Clinton was hastily dispatched to the region by President Barack Obama to join a group of world leaders working to halt the violence. "In the days ahead, the United States will work with our partners here in Israel and across the region toward an outcome that bolsters security for the people of Israel, improves conditions for the people of Gaza and moves toward a comprehensive peace for all people of the region," she said.

She expressed sorrow for the heavy loss of life on both sides, but called for Palestinian rocket attacks on Israel to end and stressed that the American commitment to Israel's security was "rock solid". "The goal must be a durable outcome that promotes regional stability and advances the security and legitimate aspirations of Israelis and Palestinians alike," she said.

US State Department spokeswoman Victoria Nuland said Mrs Clinton met Mr Netanyahu and other Israeli officials for two hours. "They discussed efforts to de-escalate the situation and bring about a sustainable outcome that protects Israel's security and improves the lives of civilians in Gaza," Ms Nuland said. "They also consulted on her impending stops in Ramallah and Cairo, including Egyptian efforts to advance de-escalation."

Mrs Clinton will meet Palestinian president Mahmoud Abbas in the West Bank and Egyptian leaders in Cairo later.

Israel launched the offensive on November 14 in a bid to end months of rocket attacks out of the Hamas-run territory, which lies on Israel's southern flank. After assassinating Hamas' military chief, it has carried out a blistering campaign of air strikes, targeting rocket launchers, storage sites and wanted militants.

The campaign has killed more than 130 Palestinians, including dozens of civilians, and wounded hundreds of others. Five Israelis have been killed by rocket fire, including a soldier and a civilian contractor on Tuesday.

The Press Association, photo by ICRC