GAZA CITY, Palestinian Territories - A fragile ceasefire around Gaza held for a second day Friday as Israel's relations with its US ally showed new signs of strain with tough talks looming on a more lasting peace.
Washington denied a report that the White House was tightening the reins on the routine delivery of military aid to Israel over concerns about the proportionality of its military action in Gaza.
But the State Department acknowledged that arms shipments were being kept under review in the face of a conflict that has killed 1,962 Palestinians and 67 people on the Israeli side since July 8.
Egyptian mediators won a new five-day ceasefire late Wednesday to give Israeli and Palestinian negotiators more time to thrash out a longer-term truce.
The ceasefire got off to a rocky start in its first few hours but Israeli officials said it had held into a second day Friday.
The military said there was no Palestinian rocket fire overnight and that it had carried out no air strikes.
"There was nothing," a spokeswoman told AFP.
But the negotiations in Cairo for a longer-term settlement were not expected to resume before Saturday evening as negotiators from both sides held consultations with their political leaderships about the parameters for an eventual compromise.
Gaza's Islamist de facto rulers Hamas, who have representation on the Palestinian negotiating team, are insisting that there can no return to peace without a lifting of Israel's eight-year blockade of the beleaguered coastal enclave.
But Israel's rightwing government - under pressure from constituents from Gaza border towns that have endured persistent rocket fire from the territory - is refusing to countenance any major reconstruction effort without full demilitarisation.
'Live in peace'
Thousands of Israelis joined by the mayor of the border town of Sderot, Alon Davidi - a member of Prime Minister Benjamin Netanyahu's Likud party - rallied in Tel Aviv late Thursday against any outcome that does not provide them with lasting security.
"This is a universal principle. We want to live in peace," Davidi told the crowd.
The army says Palestinian militants in Gaza have launched more than 3,500 rockets since July 8. More than 2,790 have slammed into Israel and around 600 have been shot down.
Netanyahu was to convene his security cabinet for a second day Friday to hammer out a negotiating position for the resumed truce talks.
The Israeli premier leans heavily on support in his governing coalition on parties to the right that advocate a wholesale reoccupation of Gaza which Israel evacuated in 2005.
Top-selling Israeli newspaper Yediot Aharonot quoted one minister as saying he and colleagues had been kept in the dark about progress in the Cairo talks and only learnt of Wednesday night's ceasefire extension from watching a televised news conference by the Palestinians.
"It was simply unreal," the unidentified minister was quoted as saying.
But with three civilians killed on the Israeli side against many hundreds in Gaza, Israel faces mounting pressure from its Western allies that has drawn appeals from more centrist ministers for a compromise.
"The relations with the US are a strategic asset that must not be harmed," Friday's Maariv daily quoted Finance Minister Yair Lapid as saying.
"This is a worrying trend and we cannot let it continue."
Tension with US
Israel secured supplies of ammunition from the Pentagon last month without the approval of the White House or the State Department, The Wall Street Journal reported.
President Barack Obama's administration, caught off guard as it tried to restrain Israel's campaign in Gaza, has since tightened controls on arms shipments to Israel, the newspaper said, quoting US and Israeli officials.
The newspaper said Obama and Netanyahu had a particularly tense phone call on Wednesday and that the Israeli leader wanted US security assurances in return for a long-term deal with Hamas.
But the newspaper said Netanyahu had essentially "pushed the administration aside," reducing US officials to bystanders instead of their usual role as mediators.
State Department spokeswoman Marie Harf disputed the article. She acknowledged that the administration was looking carefully at arms shipments to Israel but said the process was "by no means unusual." "Given the crisis in Gaza, it's natural that agencies take additional care to review deliveries," she told reporters.
Relations between Washington and its Israeli ally were already strained by the collapse of US-brokered peace talks earlier this year that Obama administration had made a top foreign policy priority.
Obama has defended Israel's use of force against rockets fired by Hamas from the Gaza Strip but has repeatedly voiced concern over the civilian death toll.
The United Nations says that 72 percent of the Palestinian dead have been civilians.