Hamas rejected an Israeli ceasefire proposal made at talks in Cairo, a senior Hamas official said on Monday, and Israeli Prime Minister Benjamin Netanyahu said a date was set for an invasion of Rafah, Gaza's last refuge for displaced Palestinians.

Israel and Hamas sent teams to Egypt on Sunday for talks that included Qatari and Egyptian mediators as well as CIA Director William Burns.

Burn's presence underlined rising pressure from Israel's main ally the US for a deal that would free Israeli hostages held in Gaza and get aid to Palestinian civilians left destitute by six months of conflict.

But senior Hamas official Ali Baraka said: "We reject the latest Israeli proposals that the Egyptian side informed us of. The politburo met today and decided this."

Details of the proposal were not immediately known.

In Jerusalem on Monday, a day after Israeli forces pulled back from some areas of southern Gaza, Netanyahu said he had received a detailed report on the talks in Cairo.

"We are constantly working to achieve our goals, first and foremost the release of all our hostages and achieving a complete victory over Hamas," Netanyahu said.

"This victory requires entry into Rafah and the elimination of the terrorist battalions there. It will happen – there is a date." He did not specify the date.

Rafah is the last refuge for Palestinian civilians displaced by relentless Israeli bombardments that have flattened their home neighbourhoods. It is also the last significant redoubt of Hamas combat units, Israel says.

More than one million people are crammed into the southern city in desperate conditions, short of food, water and shelter, and foreign governments and organisations have urged Israel against storming Rafah for fears of a bloodbath.

Hundreds of residents who had been living in tents in Rafah ventured back to their devastated home areas on Monday following the Israeli pullback. Some rode on donkey carts, rickshaws and open-deck vehicles while some just walked.

"It is a shock, a shock ... the destruction is unbearable," said resident Mohammed Abou Diab. "I am going to my house and I know that it is destroyed. I am going to remove the rubble to get a shirt out," he added. (Reuters)