Palestinians were trying to return to a semblance of their normal lives in Gaza on Tuesday as a 72-hour truce entered its second day and negotiators sat down in Cairo to seek a permanent end to hostilities.

The enclave was quiet following days of Egyptian-brokered mediation to stem violence which has killed 1,945 Palestinians and 67 on the Israeli side since July 8.

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With no reports of violations on either side since midnight on Sunday, shops and businesses started to reopen and people ventured onto the streets of the war-torn coastal region, which is home to 1.8 million Palestinians.

Outside a UN-run school, a clutch of cars and donkey carts waited to take some refugees back to homes they had fled during the month of fighting, the AFP news agency reported.

"We want to go back to see what happened to our house," said Hikmat Atta, 58, who piled his family into a small cart to visit their home in the northern town of Beit Lahiya.

But, with the second truce in a week still in its early stages, he was not taking any chances.

"We're just going back for the day, at night we'll come back here," he said.

Palestinian emergency services said that a one-month-old baby girl died on Monday of injuries sustained during the fighting, raising the overall death toll in Gaza to 1,945.

In Cairo, Egyptian intelligence mediators were locked in talks with the Palestinian delegation, which they will later relay to Israeli negotiators.

The indirect talks started on Monday, with Egypt acting as a go-between for the two sides. 

'End to blockade'

Egypt has urged the warring sides to use the new lull to reach "a comprehensive and permanent ceasefire," after efforts to extend a similar truce last week collapsed into a firestorm of violence.

Israel insists that the security of millions of its citizens subject to constant fear from Palestinian rocket attacks be guaranteed.

Hamas, which runs Gaza, has said its acceptance of any permanent agreement is conditional on Israel lifting its eight-year blockade on the enclave.

Yuval Steinitz, the Israeli intelligence minister, warned that without a reasonable outcome to the talks, his country would have to consider sending ground troops back into Gaza.

"Either there will be a reasonable resolution of the situation in Gaza, or, if the fire resumes, we will have to consider a broadening of the operation, including an expansion on the ground, overthrowing the Hamas authorities and the demilitarisation of Gaza by ourselves," Steinitz told army radio.

Source: Agencies