The United States said on Friday that progress had been made at the latest round of Gaza truce talks, after the presence of Israeli troops on the Egyptian border emerged as a major sticking point.

The White House said CIA chief William Burns was among US officials taking part in the discussions in Cairo, joining the heads of Israel's spy agency and security service.

"There has been progress made. We need now for both sides to come together and work towards implementation," US National Security Council spokesman John Kirby said.

Preliminary talks that began on Thursday "were constructive in nature", he said, adding that reports that the diplomacy was "near collapse" were inaccurate.

An Egyptian source close to the negotiations told AFP the Egyptian and Qatari intelligence chiefs were also taking part.

CIA Director William Burns at a meeting in Washington. File/AFP

"The discussions are taking place in Cairo... in preparation for an enlarged round of negotiations which will begin on Sunday," the source said.

"Washington is discussing with mediators new proposals to bridge the gap between Israel and Hamas and for mechanisms to implement" the plan.

According to the White House, US President Joe Biden discussed the upcoming talks by telephone Friday with Egyptian President Abdel Fattah Al Sisi and Qatari Emir Sheikh Tamim Bin Hamad Al-Thani.

The Egyptian source said Sunday's negotiations would be "a pivotal step in formulating an agreement that will be announced if Washington can pressure (Israeli Prime Minister Benjamin) Netanyahu".

Representatives of Hamas, whose unprecedented October 7 attack on Israel triggered the war in Gaza, were not attending the Cairo talks.

Egyptian President Abdel Fattah Al Sisi (right) meets with CIA Director William Burns in Cairo. File photo

An official from the movement, Hossam Badran, told AFP Friday that Netanyahu's insistence that his troops remain on a strip along the Gaza-Egypt border called the Philadelphi Corridor reflected "his refusal to reach a final agreement".

Egypt, Qatar and the United States have for months tried to reach a deal to end more than 10 months of war between Israel and Hamas.

Previous optimism during months of on-off truce talks has proven unfounded.

Fighting raged on Friday, with witnesses reporting combat in northern, central and southern Gaza.

An overnight strike on a house west of the southern city of Khan Younis killed 12 people — including four women and four children — and wounded a number of others, Gaza's civil defence agency said early on Saturday.

Agence France-Presse