* Israel pounds Gaza despite Trump's call for end to bombing * Palestinians wonder when Trump's Gaza plan will be implemented * Egypt prepares to host ceasefire talks * Israeli markets hit highs in sign of optimism (Updates death toll in paragraph 4, Palestinian man in paragraphs 5-6) By Nidal al-Mughrabi and Steven Scheer CAIRO/JERUSALEM, Oct 5 (Reuters) – Israeli planes and tanks pounded areas across the Gaza Strip overnight and on Sunday, destroying several residential buildings, witnesses said, as Palestinians hoped a U.S. plan to end the war would soon ease their suffering. U.S. President Donald Trump, who had called for an end to the bombing, said on Saturday on his Truth Social platform that Israel had agreed to an "initial withdrawal line" inside Gaza and that "when Hamas confirms, the Ceasefire will be IMMEDIATELY effective." Israel kept up the military pressure in Gaza as Egypt prepared to host delegates from Hamas, Israel and the United States, and Qatar, to kick off talks over the implementation of the most advanced effort yet to halt the conflict. Local Palestinian health authorities said Israeli fire killed at least 16 people across the Gaza Strip on Sunday, including four seeking aid south of the enclave and five people killed in an airstrike in Gaza City. Shadi Mansour stood in the destruction left by an Israeli airstrike in the Gaza City suburb of Tuffah on Saturday, which killed his son Ameer, 6, and 16 other people. "Is he a member of the resistance? Is he a fighter? All the targets of the Israeli army are children," said Mansour. Israeli forces warned residents who have left the city against returning, saying it was a "dangerous combat zone." MULTIPLE CEASEFIRE EFFORTS HAVE FAILED The Israeli military has accused the Palestinian militant group Hamas, which controls Gaza, of using human shields, an allegation it denies. Hamas and many Palestinians accuse Israel of indiscriminate bombings that kill many civilians. Some Palestinians, who have seen multiple ceasefire efforts fail since the war began two years ago and spread through the Middle East, are losing patience. Ahmed Assad, a displaced Palestinian man in central Gaza, said he had been hopeful when news broke of Trump's plan. "Unfortunately, there is no translation for this on the ground. We do not see any change to the situation, on the contrary, we don’t know what action to take, what shall we do? Shall we remain in the streets? Shall we leave?" he asked. EGYPT TALKS TO TACKLE UNRESOLVED ISSUES Hamas had drawn a welcoming response from Trump on Friday by saying it accepted certain key parts of his 20-point peace proposal, including ending the war, Israel's withdrawal, and the release of Israeli hostages and Palestinian captives. But the group left some issues up for further negotiation in Egypt, as well as questions unanswered, such as whether it would be willing to disarm, a key demand from Israel to end the war. "Progress would depend on whether Hamas would agree to the map, which shows the Israeli army would remain in control of most of the Gaza Strip," said a Palestinian official, close to the talks who asked not to be named. "Hamas may also ask for a strict timetable for the Israeli withdrawal from Gaza. The first phase of talks will determine how things are going to proceed," he told Reuters. In a sign of Israeli optimism over the Trump plan, the shekel currency hit a three-year high against the dollar and Tel Aviv stocks reached an all-time high. Some people in Tel Aviv shared the optimistic sentiment. "It's the first time in months that I'm actually hopeful. Trump has really instilled a lot of hope into us, and we believe in him and his leadership," said resident Gil Shelly. Domestically, Israeli Prime Minister Benjamin Netanyahu is caught between growing pressure to end the war — from hostage families and a war-weary public — and demands from hardline members of his coalition who insist there must be no let-up in Israel's campaign in Gaza. Far-right Finance Minister Bezalel Smotrich said on X that halting attacks on Gaza would be a "grave mistake." Smotrich and Security Minister Itamar Ben-Gvir, also a hardliner, have significant influence in Netanyahu's government and have threatened to bring it down if the Gaza war ends. But opposition leader Yair Lapid of the centrist Yesh Atid party has said political cover will be provided so the Trump initiative can succeed and "we won't let them torpedo the deal". RETURN OF HOSTAGES Under Trump's plan, all Israeli hostages, alive and deceased, would be released. Israel says 48 hostages remain, 20 of whom are alive. There may be logistical challenges. Sources close to Hamas told Reuters handing over living hostages could prove relatively straightforward, but retrieving bodies of dead ones amid the devastation and rubble of Gaza would take longer than a few days. Trump said on Friday he believed Hamas had shown it was "ready for a lasting PEACE" and he called on Netanyahu's government to halt airstrikes in Gaza. Israel began attacking Gaza after the October 7, 2023, Hamas-led attack on Israel in which some 1,200 people, mostly civilians, were killed and 251 taken hostage, according to Israeli tallies. Israel's campaign has killed more than 67,000 people in Gaza, most of them civilians, according to Gaza health authorities. (Additional reporting by Jaidaa Taha in Cairo, Mahmoud Issa in Gaza and Miro Maman in Tel Aviv; Writing by Michael Georgy; Editing by William Maclean, Louise Heavens and Ros Russell)
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