Guns have stayed silent in the tiny Palestinian enclave since 8:00 am (0500 GMT) Tuesday, bringing relief to millions of people on both sides after the deaths of 1,886 Palestinians and 67 on the Israeli side.
Egyptian mediators have accelerated efforts to extend the truce after it expires at 0500 GMT on Friday, shuttling between Israeli and Palestinian delegations in Cairo.
"Israel has no problem extending the ceasefire unconditionally," an Israeli official told AFP on condition of anonymity late Wednesday.
A spokeswoman for the Israeli army said 27,000 reservists called up for the conflict had been sent home, leaving a force of 55,000 still on active duty, in another sign of growing hopes for long-term quiet.
But Hamas deputy leader Mussa Abu Marzuq, part of the Palestinian delegation holding talks in Cairo, denied overnight there was yet any agreement.
"There is no agreement to extend the ceasefire," he wrote on Twitter.
"Any news about the extension of the truce is unfounded," added Hamas spokesman Sami Abu Zuhri.
In the battered Gaza Strip, shops, banks and markets have reopened, and people crowded into the streets.
Emergency services cleared rubble and retrieved more bodies, raising the overall Palestinian death toll to 1,886 according to the Palestinian health ministry.
In the southern town of Rafah, one of the worst-hit areas where Israel sought to destroy a network of Hamas tunnels, local residents buried bodies stacked in morgues while the fighting raged.
Egyptian officials mediating the Cairo talks for a durable truce in Gaza met a Palestinian delegation to relay terms laid down by an Israeli team overnight, Palestinian officials said.
Hamas officials have publicly rejected an Israeli demand that militants in Gaza disarm.
The Palestinians have insisted Israel end its eight-year blockade of Gaza and free scores of Hamas prisoners.
Israel has refused to deal with a Palestinian unity government that emerged after Hamas signed a deal with Palestinian Authority Chief Mahmud Abbas in April.
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