By Maayan Lubell and Nidal al-Mughrabi
JERUSALEM/GAZA (Reuters) - Israel set out limited goals for Gaza truce talks on Sunday, saying the focus was on a proposal to ease its blockade of the Islamist Hamas-controlled territory in return for the Palestinians calming their side of the frontier.
The Israeli statement came hours before Prime Minister Benjamin Netanyahu convened his security cabinet to discuss, and possibly approve U.N.- and Egyptian-brokered ideas for preventing another threatened Gaza war.
A very brief statement issued after the meeting ended revealed little. It said that Israel's military chief had briefed the cabinet about the situation in the Gaza Strip and that the army was "prepared for any scenario."
The United Nations and Egypt have not publicly detailed their proposals. They have spoken generally of a need to improve humanitarian conditions in Gaza, stem cross-border hostilities and reconcile Hamas - which refuses formal peacemaking with Israel - to its Western-backed Palestinian rivals.
Gaza, under years of grinding Israeli and Egyptian sanctions aimed at isolating Hamas, has seen a surge in tensions since Palestinians launched weekly border protests on March 30, drawing Israeli army fire that has killed at least 157 people.
There have also been shelling exchanges between Hamas-led militants and Israel in which around 10 Palestinian gunmen and four civilians have died, Gaza sniper attacks that killed an Israeli soldier and wounded another, and wide-scale brushfires set in Israel by incendiary kites and helium balloons from Gaza.
Israel responded on July 9 by shuttering Gaza's main commercial terminal and limiting a Palestinian fishing zone off the enclave, measures it offered to reverse on Sunday.
"A complete ceasefire (by the Palestinians) will lead, on Israel's part, to the reopening of the Kerem Shalom crossing and renewal of the permits given in respect to the fishing zones," said the Israeli official, who spoke on condition of anonymity.
This offer would be the focus of Sunday's deliberations, the official said, adding that any eventual broader agreement over Gaza would require a guarantee for the return of the remains of two Israeli soldiers killed in the 2014 Israel-Hamas war, and two civilians lost in Gaza.
Hamas has linked their fate to Israel freeing Palestinian security detainees - something many Israelis oppose.
Hamas, which convened several of its top leaders to Gaza last week for consultations, also sounded circumspect on Sunday.
"Hamas has conducted internal meetings that have not yet ended," one senior official, Hussam Badran, told a Gaza radio station.
"The suffering of our people, and the 12-year blockade imposed with no guilt on their part, requires that all Palestinian leaders search for a real solution to this suffering ... without giving concessions when it comes to the known and outstanding positions and rights of our people."
More than two million Palestinians, mostly the stateless descendants of people who were driven out or fled from territory that is now Israel at its founding in 1948, are packed into the narrow strip.
Israel withdrew its troops and settlers from Gaza in 2005, but maintains tight control of its land and sea borders. Egypt also restricts movement in and out of Gaza on its border.
Israel, the United States and other Western countries regard Hamas as a terrorist organization. Israel and Hamas have fought three wars since 2008, the last of them in 2014.
The Fatah movement of Western-backed Palestinian President Mahmoud Abbas who holds sway in the Israeli-occupied West Bank has denounced the talks. A spokesman said any deal risked ending hopes of achieving Palestinian statehood.
"(A deal would bring about a) separation of Gaza from the rest of the homeland and would create a mini-state which will be the graveyard of our national project," said Munir Al-Ghaghoub, a spokesman for Abbas's Fatah movement.
But after a meeting of Palestinian faction representatives including Fatah, Hamas's Badran said: "There will be no state in Gaza and no state without Gaza."
In what appeared to be a confidence-building gesture by Cairo, a pro-Hamas website said Egypt was on Sunday beginning to allow cooking gas across its border to Gaza to make up for the shortfall in Israeli supplies.
Also on Sunday, the Israeli military said it fired toward a vehicle used by Palestinian balloon-launchers in Gaza on Sunday. Palestinian medics said four people were wounded.
Israel's Defence Ministry released first images of the barrier it has built along the border with the Gaza Strip that stretches into the sea, and which it began constructing two months ago.
Built up with rocks and gravel, it stretches 200 metres from the shore into the Mediterranean. It is 50 metres wide and a six-metre high steel fence is placed next to it facing the Gaza side which will have surveillance devices placed on it.
(Reporting by Maayan Lubell and Nidal al-Mughrabi; Writing by Dan Williams and Ori Lewis; editing by David Evans and Alexandra Hudson)