CAIRO/JERUSALEM — The latest round of Gaza truce talks in Cairo has reached a critical point as negotiators sent contradictory signals, after Israel pulled its troops from the southern part of the enclave on Sunday.

Six months into its offensive against Hamas, Israel voiced cautious optimism about the latest round of mediated negotiations.

Israel and Hamas sent teams to Egypt on Sunday, following the arrival on Saturday of CIA Director William Burns, whose participation followed US pressure for a deal that would free hostages held in Gaza and ease the humanitarian crisis there.

According to Egypt's Al-Qahera News state-affiliated TV channel, Hamas and Qatari delegations left Cairo and will return within two days to agree on the terms of a final agreement, while the Israel and US delegations will leave within a few hours.

In Jerusalem, Israeli Foreign Minister Israel Katz described the Cairo talks as the closest the sides have come to a deal since a November truce under which Hamas freed dozens of hostages.

"We have reached a critical point in the negotiations. If it works out, then a large number of hostages will come home," he told Israel's Army Radio.

Two Egyptian sources also said the talks are making progress in Cairo and all parties have agreed on the basic points.

The sources said that both sides made concessions that could help pave the way for a cease-fire deal in parallel meetings with mediators.

However, a Hamas official told Reuters on Monday that no progress has been made at the new round of cease-fire talks in Cairo.

"There is no change in the position of the occupation and therefore, there is nothing new in the Cairo talks," the Hamas official, who asked not to be named, told Reuters. "There is no progress yet," he added.

Hamas seized 253 people during an Oct 7 killing spree in southern Israel that triggered the conflict. Of those, 129 hostages remain, and negotiators have spoken of about 40 going free in the first stage of a prospective deal with Hamas.

Hamas wants to parlay any deal into an end to the conflict, full withdrawal of all Israeli forces and return of displaced Gazans. Israel has ruled out the first two demands.

While saying he was more optimistic than before about a diplomatic breakthrough, Katz added: "Israel is poised to continue the war."

Growing call

Israeli Prime Minister Benjamin Netanyahu said on Sunday that despite growing international pressure, Israel would not give in to "extreme" Hamas demands.

The development of the truce talks came after Israel pulled its forces out of the southern Gaza Strip on Sunday.

However, Israel's Defense Minister Yoav Gallant said troops had left the city of Khan Younis "to prepare for future missions, including … in Rafah".

Local broadcaster Channel 13 TV reported that Israel was preparing to begin evacuating Rafah within one week and the process could take several months.

Israel for weeks has vowed a ground offensive in nearby Rafah. But the city shelters some 1.4 million people — more than half of Gaza's population. The prospect of an offensive has raised global alarm, including from Israel's top ally, the US.

White House national security spokesman John Kirby repeated on Sunday the US opposition to a Rafah offensive and told ABC News the US believes the partial Israeli withdrawal "is really just about rest and refit for these troops that have been on the ground for four months and not necessarily, that we can tell, indicative of some coming new operation for these troops".

After troops left areas in and around the largely destroyed Khan Younis, a stream of displaced Palestinians walked there, hoping to return to their homes from temporary shelters in Rafah, a little further south.

"It smells like death," said Maha Thaer, a mother of four, as she returned to the city on Sunday.

On Monday, preliminary hearings opened at the United Nations' top court in a case that seeks an end to German military and other aid to Israel.

Nicaragua argues that by giving Israel political, financial and military support and by defunding the United Nations aid agency for Palestinians, UNRWA, "Germany is facilitating the commission of genocide and, in any case has failed in its obligation to do everything possible to prevent the commission of genocide".

Agencies via Xinhua