US President Barack Obama has demanded an immediate ceasefire in Gaza after speaking to Israeli Prime Minister Benjamin Netanyahu on Sunday evening.

Mr Obama said the ceasefire should be without any preconditions to allow humanitarian aid to reach the people of Gaza.

The Israeli security cabinet unanimously rejected US Secretary of State John Kerry’s ceasefire proposal last Friday over concerns that the terms of the deal were too favourable to Hamas.

Despite this, Israel has said it would not initiate military action over the three-day Eid al-Fitr holiday that marks the end of Ramadan. However, it said the IDF would act against rocket fire and prevent terrorist attacks from Gaza.

Israel and Hamas agreed a 12-hour truce on Saturday.

The pause in the fighting began at 8am local time.

Israel said it would continue to locate and "neutralise" Hamas tunnels during the truce.

International efforts to negotiate a longer ceasefire continue in Cairo.

Israel military confirmed that two Israelis soldiers were killed in fighting overnight, with 19 Palestinians reported to have been killed.

On Friday afternoon Israel’s security cabinet had met to discuss the possibility of accepting a ceasefire with Hamas, based on proposals made by US Secretary of State John Kerry.

Hamas sources were said to be inclined to accept the offer amid suggestions the terrorist group would announce its willingness to go ahead with the break in fighting by Friday evening.

Spokesmen for Israeli Prime Minister Benjamin Netanyahu were unable to comment on the security cabinet’s deliberations on Friday afternoon.

At least four Palestinians were killed and hundreds injured on Friday during violent West Bank protests against the continuing conflict in Gaza.

The “day of rage” saw tens of thousands march from Ramallah to East Jerusalem, with regular clashes between Palestinians and Israeli security forces and settlers.

The IDF announced that reservist soldier Yair Ashkenazy, 36, of Rehovot, was killed in combat in the northern Gaza Strip on Friday morning. It was suggested that he could have been killed by “friendly fire”.

It also said Sergeant Oron Shaul, who was feared to have been kidnapped in Gaza last Sunday, was now believed to have been killed in action. His family has been notified of his death.

Their deaths mean 34 IDF combatants have been killed since the start of Operation Protective Edge.

In Britain, Labour leader Ed Miliband voiced his concerns about the spiralling violence, which he said was now “out of control”.

Mr Miliband said he spoke as a friend of Israel and of the Palestinian people and condemned rocket attacks by Hamas.

But in a keynote speech in London, he added: “But I simply cannot justify what we are seeing unfolding in Gaza: the mounting death toll of innocent Palestinian civilians.

“We opposed this latest Israeli incursion into Gaza because, despite the extreme provocation from Hamas, we feared it would lead to the further deaths of the innocent, fail to act as a deterrent and simply risk recruiting more people to the cause of Hamas.

“The tragedy yesterday at the UN school is a horrific example of precisely what we feared: the death, destruction and mayhem resulting from the escalation of violence. And now it is spreading to East Jerusalem and the West Bank.”

Mr Miliband said Europe should support US attempts to broker a ceasefire and said his party would “always strive to play its part in seeking to secure peace and justice in the Middle East”.

Interviewed on LBC radio, Liberal Democrat Bradford East MP David Ward discussed his tweet earlier in the week when he said he would be prepared to fire a rocket on Israel.

“If they thought I meant something else then I apologise if they misinterpreted what I wanted to say,” Mr Ward said.

Asked why people misinterpreted his tweet he said: “Some genuinely didn’t really understand what I was saying – others really knew what I was saying but wanted to attack me and get it away from what I wanted to refer to. It’s a tactic used to criticise me.”

Mr Ward claimed he had received death threats following the controversy.

He added: “No one seems to have dug out that I was talking in a debate on the same day and referred to the ex-Gaza refugees in Jordan. I began the speech by condemning violence in Gaza at the present time on both sides, very clearly.

“If you refer to the people who are firing the rockets as mad, ideological terrorists, then where do we go? How do we move forward? How does this end?

“We will at some point, God-willing, move towards a ceasefire… but it’s not peace for the Palestinians. It’ll simply go back to Israelis being protected by a force hemming people in in Gaza.”

Mr Ward said Israel’s response to Hamas rockets had been “pretty stupid”.

“How does it contribute to their own security?” he asked. “Don’t the Gazans have a right to defend themselves? The US, Europe, ourselves, we’ve all failed the Palestinians.”