JERUSALEM (AFP) - Israel denied on Thursday that it had made a decision on an Egyptian proposal for a ceasefire in Gaza, following reports in Cairo that it has responded favourably. "We're talking to Egypt. Tonight Amos Gilad will return, he will make a report and we will decide then," government spokesman Mark Regev told AFP, referring to an Israeli envoy who had held talks in Cairo earlier on Thursday. A senior Israeli official told AFP that Prime Minister Ehud Olmert had made similar comments to US Secretary of State Condoleezza Rice in a telephone call. "Israel was waiting for the return of Amos Gilad from Egypt in order to decide how progress can be made," he said. Washington is ready to offer Israel guarantees to prevent arms smuggling into Gaza, a key Israeli demand for ending its war on Hamas, Olmert's office said on Thursday. Rice "said that the US was ready to help in the solution of the issue of the arms smuggling and to sign a memorandum of understanding on this issue," the premier's office said in a statement. Meanwhile, an Israeli delegation responded favourably during a meeting on Thursday to proposals for an end to war in Hamas-controlled Gaza Strip, but there will have to be further talks, an Egyptian official said. "Well, Israel (gave its) OK, but a new meeting" will have to take place, the foreign ministry official, speaking on condition of anonymity, told AFP. Another Egyptian official said: "There was a completely favourable Israeli response to the Egyptian initiative, and there were some observations on Hamas's response. "Israel had observations on Hamas's vision, and there will have to be another meeting," the official was quoted as saying on state television. Palestinian president Mahmud Abbas told reporters in Ramallah on Thursday that he hopes for developments on a ceasefire in the next few hours. "The next few hours will be decisive and we hope that there will be positive developments for a rapid ceasefire," he said, after holding talks with German Foreign Minister Frank-Walter Steinmeier. Egyptian Foreign Minister Ahmed Abul Gheit has said the plan launched by his President Hosni Mubarak on January 6 calls for an "immediate ceasefire and acceptance of withdrawal" of Israeli forces from the Gaza Strip. Israel has made an end to its offensive conditional on a halt to Gaza rocket fire against southern Israel and creating an effective mechanism to end smuggling into the territory from Egypt. Israel says Egypt does not do enough to combat the tunnels, while Egypt has rejected the presence of a foreign force on its territory. Prime Minister Ehud Olmert's office said on Thursday that Washington is ready to offer Israel guarantees to prevent arms smuggling into Gaza. In a phone call with Olmert, US Secretary of State Condoleezza Rice "said that the United States was ready to help in the solution of the issue of the arms smuggling and to sign a memorandum of understanding on this issue," the premier's office said in a statement.