Mediators says Israel and Hamas are at the "closest point" yet to agreeing on a ceasefire in Gaza and the release of dozens of hostages.
Foreign Ministry spokesman Majed al-Ansari said at a weekly briefing on Tuesday that the ongoing negotiations are positive and productive, while declining to get into the details of the sensitive talks.
Qatar has been a key mediator with Hamas in over a year of indirect talks and is currently hosting the negotiations.
The Associated Press obtained a copy of the proposed agreement, and an Egyptian official and a Hamas official confirmed its authenticity. The plan would need to be submitted to the Israeli Cabinet for final approval.
The United States, Egypt and Qatar have spent the past year trying to mediate an end to the 15-month war and secure the release of dozens of hostages captured in Hamas' October 7, 2023, attack that triggered it.
Some 100 Israelis are still captive inside Gaza, and the military believes at least a third them are dead.
Officials have expressed mounting optimism that they can conclude an agreement ahead of the January 20 inauguration of US President-elect Donald Trump, whose Mideast envoy has joined the negotiations.
The offensive has reduced large areas of the territory to rubble and displaced around 90 per cent of Gaza's population of 2.3 million, with hundreds of thousands packed into tent camps along the coast where hunger is widespread.
Israeli strikes across Gaza overnight and into Tuesday killed at least 18 Palestinians, including two women and four children, while Yemen's Houthi rebels fired two missiles at Israel, setting off sirens and sending people racing into shelters. No one was wounded by the projectiles.
Amid talk of a 'breakthrough' in bringing an end to the Gaza war, Israeli strikes have continued. (AP PHOTO)
The three-phase agreement — based on a framework laid out by US President Joe Biden and endorsed by the UN Security Council — would begin with the gradual release of 33 hostages over a six-week period, including women, children, older adults and wounded civilians in exchange for potentially hundreds of Palestinian women and children imprisoned by Israel.
Among the 33 would be five female Israeli soldiers, each of whom would be released in exchange for 50 Palestinian prisoners, including 30 convicted militants who are serving life sentences. By the end of the first phase, all civilian captives — living or dead — will have been released.
During this first, 42-day phase, Israeli forces would withdraw from population centres, Palestinians would be allowed to start returning to their homes in northern Gaza and there would be a surge of humanitarian aid, with some 600 trucks entering each day.
Details of the second phase still must be negotiated and remain difficult to resolve. The deal does not include written guarantees that the ceasefire will continue until a deal is reached.
The three mediators, however, have given Hamas verbal guarantees that negotiations will continue as planned.
The deal would allow Israel throughout the first phase to remain in control of the Philadelphi Corridor, the band of territory along Gaza's border with Egypt, which Hamas had initially demanded Israel withdraw from. However, Israel would pull out from the Netzarim Corridor, a belt across central Gaza where it had sought a mechanism for searching Palestinians for arms when they return to the territory's north.
Hamas has previously said it will not free the remaining hostages without an end to the war and a complete Israeli withdrawal, while Israeli Prime Minister Benjamin Netanyahu has in the past vowed to resume fighting unless Hamas's military and governing capabilities are eliminated.
Unless an alternative government for Gaza is worked out in those talks, it could leave Hamas in charge of the territory.
In a third phase, the bodies of remaining hostages would be returned in exchange for a three- to five-year reconstruction plan to be carried out in Gaza under international supervision.
Israel and Hamas have come under renewed pressure to halt the conflict in the lead-up to Trump's inauguration next week. His Middle East envoy, Steve Witkoff, recently joined US, Egyptian and Qatari mediators in the Gulf country's capital, Doha.
Trump said late Monday that a ceasefire was "very close."
"I understand ... there's been a handshake and they are getting it finished -- and maybe by the end of the week," he told the American cable channel Newsmax.
Hamas-led militants killed around 1,200 people, mostly civilians, in the October 7 attack and abducted another 250. Around half those hostages were freed during a brief ceasefire in November 2023.
Israel's retaliatory offensive has killed over 46,000 Palestinians, more than half of them women and children, according to Gaza's Health Ministry, which does not say how many of the dead were combatants.
