Progress is stalling at talks aimed at securing a ceasefire in Gaza, with the sides divided over the extent of Israeli forces' withdrawal from the Palestinian enclave, Palestinian and Israeli sources familiar with the negotiations in Doha said on Saturday.

The indirect talks over a US proposal for a 60-day ceasefire continued throughout Saturday, an Israeli official told Reuters, seven days since talks began.

In Gaza, medics said 17 people trying to get food aid were killed on Saturday when Israeli troops opened fire, the latest mass shooting around a US-backed aid distribution system that the United Nations says has resulted in 800 people killed in six weeks.

"We were sitting there, and suddenly there was shooting towards us. For five minutes we were trapped under fire. The shooting was targeted. It was not random. Some people were shot in the head, some in the torso, one guy next to me was shot directly in the heart," eyewitness Mahmoud Makram said.

"There is no mercy there, no mercy. People go because they are hungry but they die and come back in body bags."

The Israeli military said its troops had fired warning shots, but that its review of the incident had found no evidence of anyone hurt by its soldiers' fire.

Delegations from Israel and Hamas have been in Qatar pushing for an agreement which envisages a phased release of hostages, Israeli troop withdrawals and discussions on ending the war.

The Israeli official blamed the impasse on Hamas, which he said "remains stubborn, sticking to positions that do not allow the mediators to advance an agreement". Hamas has previously blamed Israeli demands for blocking a deal.

A Palestinian source said that Hamas had rejected withdrawal maps which Israel had proposed that would leave around 40 percent of Gaza under Israeli control, including all of the southern area of Rafah and further territories in northern and eastern Gaza.

Two Israeli sources said Hamas wanted Israel to retreat to lines it held in a previous ceasefire before it renewed its offensive in March. (Reuters)