Hamas leader Khaled Mashaal has been the central force preventing a long-term truce between Israel and the Palestinians to halt more than a month of hostilities on the Gaza front, Channel 2 quoted an Israeli diplomatic source as saying on Thursday.
The leader of the Palestinian delegation to cease-fire talks, Fatah official Azzam al-Ahmed, announced on Wednesday just before midnight that a 72-hour truce would be extended for five additional days to give the sides more time to work out a long-term agreement.
The Palestinians reportedly had asked for a 72-hour extension of the truce, but Israel had insisted on a five day extension to prevent the cease-fire from ending on the Sabbath.
According to the Israeli official quoted by Channel 2, a long term deal could have already been reached, but Mashaal "was and remains the source of friction that is torpedoing a deal."
Mashaal, who resides abroad in Qatar, is enmeshed in a disagreement with the local Hamas leadership in Gaza, the report added.
Members of the Palestinian delegation said they would return to Cairo on Saturday night to begin more talks on Sunday. Israel's Security Cabinet was set to meet on Thursday at 5 p.m. to discuss cease-fire efforts.
Egyptian and Palestinian sources said Israel had tentatively agreed to allow some supplies into Gaza and relax curbs on the cross-border movement of people and goods, subject to certain conditions.
A Palestinian demand for a Gaza seaport and reconstruction of an airport destroyed in previous conflicts with Israel has also been a stumbling block, with Israel citing security reasons for opposing their operation.
The sides have agreed to delay discussion of any agreement on the ports for a month, a Palestinian official said.
As part of the Egyptian blueprint, Israel was expected to expand fishing limits it imposes on Gaza fishermen to 6 miles (10 km) from the usual 3-mile offshore zone.
"It will increase gradually to no less than 12 miles in coordination between the Palestinian Authority and Israel," the official said, referring to a likely expanded role in Gaza for Palestinian Authority President Mahmoud Abbas.
In addition, the official said, the Egyptian plan calls for reducing the size of a "no-go" area for Palestinians on the Gaza side of the border from 300 meters (328 yards) to 100 meters so that local farmers can recover plots lost during security crackdowns.