Egypt says a truce in Gaza is imminent.
President Mohammed Morsi says Israel has agreed to put any ground war on hold.
And a Hamas official has said that both parties have agreed to a ceasefire.
Sky's Sam Kiley says in spite of that, attacks from both sides continue.
"One detonation, one rocket too many, could completely blow away this ceasefire, it is absolutely poised on a knife edge."
But Sam Kiley says this announcement comes just hours after Israel said it would not hesitate to use maximum force in response to continued Palestinian attacks from Gaza.
"A great deal of what's going on is about posturing and propaganda, as much as it is about actually fighting a war. Missiles have continued to fly out of Gaza, and of course air strikes, and recently artillery and tank bombardments particularly at the south of the country have been going on."
There's still been no official announcement, but both sides say talks are going well.
Newstalk ZB's US correspondent Richard Arnold says neither side really wants to see this flare into a ground war, which would be disastrous for both.
"But the Israelis say they're not interested in simply a 'time out', they say they want a new reality, so we do not have answers to a lot of specifics about the future of the rocket threat and the Israeli retaliation, the Israelis say the talks still are ongoing."
Israel wants to have a 24 hour calming down period with no rocket fire, before agreeing to a truce.
But while peace-brokers Egypt, and Hamas, say it's a ceasefire, Israel is putting the brakes on such dramatic progress.
And CNN's Anderson Cooper, who's in Gaza, told Newstalk ZB's Mike Hosking the rocket fire continues in the meantime.
"I can tell you right now as we're speaking, I'm hearing explosions from incoming projectiles into Gaza city, there was one very close there right now. And also we've been hearing outgoing rockets probably within the last twenty minutes or so."
Additional reporting: AAP
Photo: Getty Images