Israel Defence Minister Israel Katz told his U.S. counterpart Lloyd Austin in a phone call on Wednesday there was now a chance for a new deal that would allow the return of all the hostages, including U.S. citizens, Katz's office said.
A Western diplomat in the region, however, said a deal was taking shape, but it would likely be limited in scope, involving the release of only a handful of hostages and a short pause in hostilities.
Such a truce and release would be only the second since the start of the war in October 2023.
The guarded optimism emerges as U.S. President Joe Biden's national security adviser Jake Sullivan heads to Israel for talks with Prime Minister Benjamin Netanyahu on Thursday and then to Egypt and Qatar, co-mediators with the U.S. on a deal.
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