The US and Israel have signed a deal to halt the smuggling of arms into Gaza, in what Israel's foreign minister said was an important step towards peace.The move followed a day of high-level talks in Washington and Egypt aimed at ending Israel's war with Hamas in Gaza.
Preventing arms smuggling from Egypt by Hamas is a key Israeli demand.
The BBC's Christian Fraser, who has managed to enter the Gaza Strip, says much damage can be seen and conditions for Palestinian families are tough.
Our correspondent, who finally got into Rafah from Egypt for the first time on Friday, says that while there have been targeted Israeli strikes in the town, there is much collateral damage as well, with a housing block and a playground among the sites affected.
Israel has been bombing heavily along the border area, with the aim of destroying tunnels running beneath the border between Gaza and Egypt.
Conditions for Palestinian families seeking refuge in a UN-run school in Rafah are very difficult, our correspondent says. Food and electricity supplies are limited and there is no running water.
'Vital component'
Israeli military officials said 40 overnight air strikes on Gaza targeted smuggling tunnels, rocket launching points, weapons stores and a militants' training camp.
The bodies of 23 people were later recovered in the Tel al-Hawa district of Gaza City, medics said.
Militants also continue to fire rockets into Israel. About 10 were launched on Friday but caused no injuries, the Israeli army said.
Speaking at the signing of the agreement with Israel in Washington, US Secretary of State Condoleezza Rice said she hoped it would ensure Gaza could "never again be used as a launch pad" for attacks on Israel.
The supply of arms to Hamas and other groups in Gaza was a "direct cause of the current hostilities", Ms Rice said.
"It is therefore incumbent upon us in the international community to prevent the rearmament of Hamas so that a ceasefire will be durable and fully respected," she said, adding that she was also concerned to end the suffering of Palestinians in Gaza.
Israeli Foreign Minister Tzipi Livni described the memorandum of understanding as "a vital component for the cessation of hostilities".
'Final act'
Meanwhile, talks have continued in Cairo between Israeli and Egyptian officials aimed at reaching a ceasefire agreement.
Hamas was also invited back to Cairo on Friday for more talks, an official told the al-Jazeera network.
After meeting Palestinian Authority leaders in the West Bank, UN Secretary General Ban Ki-moon called on Israel to end the fighting.
"I would like to see an immediate ceasefire," he said, adding that a deal between Israel and Hamas to stop the conflict might be possible within the next few days.
Israel has said any ceasefire must be "durable and sustainable".
Hamas leader Khaled Meshaal said they would not accept Israeli conditions for a ceasefire.
Earlier, Israeli government spokesman Mark Regev told the BBC that Israel wanted a prompt end to the violence.
"The diplomacy now is in high gear. Hopefully we're entering the final act. We want this to be over as soon as possible," he said.
Meanwhile, a teenager reportedly died during anti-Israeli protests in the West Bank on Friday.
He was killed as violence broke out between demonstrators and Israeli soldiers in the West Bank town of Hebron, reports said. Clashes were also reported at the Qalandya checkpoint.
The Israeli army had earlier closed all access to the West Bank for the next two days following a call by Hamas for all Palestinians to observe what it called a day of wrath after Friday prayers.
The Palestinian Authority issued a similar call to action to followers of Fatah, a rival Palestinian faction to Hamas.
Health officials in Hamas-controlled Gaza say at least 1,105 Palestinians have been killed and 5,100 wounded since Israel launched an operation on 27 December to end rocket attacks against its people.
Thirteen Israelis - three of them civilians - have died, while 233 soldiers have been wounded, the Israeli army says.
Tens of thousands of mourners took to the streets of Gaza City for the funeral of a top Hamas leader, Said Siyam, who died when his brother's house in Gaza City was bombed on Thursday.
In Gaza City, the BBC's Hamada Abuqammar says Israeli artillery fire has continued, even during the daily humanitarian ceasefire, although the bombardment was not as intense as on Thursday.
He said the Quds hospital was now empty, after sick and wounded patients had to be evacuated from the building overnight because of a fire caused by a tank shell.
The senior UN official in Gaza, John Ging, meanwhile described as "total nonsense" claims by Israel that militants had fired from a UN compound shelled by Israel on Thursday.
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