A round of high-level talks in Cairo meant to bring about a ceasefire and hostage deal to at least temporarily end the 10-month Israel-Hamas war in Gaza ended on Sunday without a final agreement, a US official said.

Talks will continue at lower levels in the coming days to bridge the remaining gaps.

The official, who spoke anonymously to discuss the talks, said lower level “working teams” will remain in Cairo to meet with mediators from the United States, Qatar, and Egypt in hopes of addressing remaining disagreements.

The official called the recent conversations, which began on Thursday in Cairo, “constructive” and said all parties were working to “reach a final and implementable agreement.”

Lebanon Israel Palestinians
Mourners chant slogans as they carry the coffin of Ali Ahmad Mousawi, who was killed early Wednesday by an Israeli strike, during his funeral procession in Nabi Sheet village, in Lebanon’s eastern Bekaa Valley, (Bilal Hussein/AP)

The talks included CIA director William Burns and David Barnea, the head of Israel’s Mossad intelligence agency. A Hamas delegation was briefed by Egyptian and Qatari mediators but did not directly take part in negotiations.

The end of the talks came as Israel and the Lebanese militant group Hezbollah traded heavy fire early on Sunday.

Hezbollah claimed it had hit an Israeli military intelligence site near Tel Aviv as part of a barrage of hundreds of rockets and drones, while Israel claimed its dozens of strikes had been pre-emptive to avert a larger attack. Neither offered evidence.

Hezbollah leader Hassan Nasrallah said the attack, a response to Israel’s killing of a top militant commander in Beirut last month, had been delayed to give the Gaza ceasefire talks a chance, and so fellow Iran-backed groups could discuss with Iran whether to attack Israel all at once.

“We will now reserve the right to respond at a later time” if the results of Sunday’s attack aren’t sufficient,” Mr Nasrallah said, adding that allied Houthi rebels in Yemen and Iran had yet to respond.

He told the Lebanese people: “At this current stage, the country can take a breath and relax.”

Iran’s foreign minister said the country will retaliate over the assassination of Hamas leader Ismail Haniyeh in Tehran.

“Iran reaction to Israeli terrorist attack in Tehran is definitive, and will be measured & well calculated,” Abbas Araghchi wrote on X. “We do not fear escalation, yet do not seek it — unlike Israel.”

Israel and Hezbollah said they aimed only at military targets. Israel said no military target was hit by Hezbollah but that one soldier with its navy was killed and two others were wounded either by an interceptor for incoming fire or by shrapnel from one.

Two Hezbollah fighters and a militant from an allied group were killed, the groups said.

Israeli Prime Minister Benjamin Netanyahu said the military eliminated thousands of rockets that were aimed at northern Israel and shot down drones heading for the centre of the country.

“I repeat — this is not the end of the story,” he said.

Israel’s military spokesperson, Rear Adm. Daniel Hagari, said about 100 Israeli planes struck 270 targets, 90% of them rocket launchers aimed at northern Israel.

He said they were investigating the percentage of incoming rockets and drones intercepted but said the “vast majority” were thwarted.

Hezbollah said its attack involved more than 320 Katyusha rockets aimed at multiple sites in Israel and a “large number” of drones.

Lebanon’s caretaker Economy Minister Amin Salam, after an emergency government meeting, said officials were “feeling a bit more optimistic” about a de-escalation after both sides confirmed that the operations had ended.

President Joe Biden was “closely monitoring events in Israel and Lebanon,” according to Sean Savett, a spokesman for the National Security Council.

The Pentagon said Defence Secretary Lloyd Austin spoke with his Israeli counterpart, Yoav Gallant, and ordered both U.S carrier strike groups in the region to stay after a build-up of forces across the region in recent weeks.