Egypt has drawn up a phased deal to halt fighting between Israel and Hamas and release more hostages held by the Palestinian Islamist group, a regional TV network said on Sunday.

The three-phase initiative was floated at talks held earlier this week in Cairo between Egyptian officials and a Hamas team, Saudi-owned Asharq News reported online, citing sources close to the talks.

The first phase reportedly includes a truce of at least two weeks during which Hamas would release 40 Israeli hostages - women and children as well as elderly people who are ill, the sources added.

In return, Israel would release 120 Palestinians of the same categories from its prisons, along with a cessation of hostilities and the flow of humanitarian aid into the Gaza Strip.

The second phase proposes Palestinian talks sponsored by Egypt to end intra-Palestinian “division” and create a Palestinian technocratic government to run Gaza and the West Bank, according to the report.

The third and final stage reportedly envisages a full ceasefire and a “comprehensive” deal to release all Israeli military being held by Hamas and other Palestinian factions, in exchange for Palestinian prisoners in Israel.

The third phase also includes an Israeli withdrawal from the Gaza Strip, while allowing displaced Gazans to return to their former residences in the enclave.

The proposal will be discussed by the Hamas political bureau in Qatar, the broadcaster said.

So far, there has been no comment from Egypt, or Hamas, which is categorized as a terrorist group by Israel, the European Union and the United States.

Earlier this week, a Hamas delegation led by its chief Ismail Haniyeh visited Cairo for talks with Egyptian officials, the group said.

Last month, Qatar and Egypt helped broker a temporary truce agreed by Israel and Hamas that also facilitated hostage-for-prisoner swaps.

Egypt, the first Arab country to sign a peace treaty with Israel in 1979, had mediated in previous conflicts between Palestinians and Israel.