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JERUSALEM (CBS) - Hamas has rejected an Egyptian proposal for a cease-fire to end a week of conflict between Israel and Hamas militants in the Gaza Strip that has killed 185 Palestinians and exposed millions of Israelis to Hamas rocket fire.

Israel's cabinet had just accepted the plan.

The office of Prime Minister Benjamin Netanyahu says the Cabinet met Tuesday morning and OK'd the proposal, which would have gone into effect at 9 a.m. local time (2 a.m. EDT).

It called for a cease-fire to begin within 12 hours of "unconditional acceptance" by the sides, followed by the opening of Gaza's border crossings and talks in Cairo within two days.

A senior Hamas official says the Palestinian militant group rejects Egypt's proposal. The official, Sami Abu Zuhri, spoke moments after Israel accepted the offer. Abu Zuhri told The Associated Press that the "proposal is not acceptable."

Also, a statement from Hamas' armed wing, al-Qassam Brigades, said it hadn't been presented with the Egyptian proposal and that, even if it had, al-Qassam would have been "bowing" to embrace it.

"For us, it is not worth the ink that wrote it," the Brigades added. "Our battle with the enemy to be continued and we'll be loyal to the blood of the martyrs of the Eaten Straw battle," the statement continued.

Israel launched the offensive last Tuesday, saying it was responding to weeks of rocket fire out of the Hamas-ruled territory.

Separately, U.S. Secretary of State John Kerry decided not to make an immediate trip to the Middle East to push diplomatic efforts toward a cease-fire between Israel and Hamas.

Kerry has been weighing for several days whether to extend his current diplomatic swing of Asia and Europe. U.S. officials say he has considered trips to Israel, Egypt and elsewhere in the region.

GALLERY: Israael-Gaza conflict

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But officials now say he will end the nine-day trip on Tuesday and head home.

Kerry was in Vienna Tuesday for talks with Iran's foreign minister and European partners. Together, they are trying to advance struggling negotiations aimed at curtailing Iran's nuclear program.

President Obama praised Egypt's proposal Monday, telling Muslim-Americans he's hopeful the plan can restore calm in the wake of a deadly wave of violence.

"We're going to continue to do everything we can to facilitate a return to the 2012 cease-fire," Obama said at a White House dinner celebrating the Muslim holy month of Ramadan. "We are encouraged that Egypt has made a proposal to accomplish that goal."

The upbeat assessment from Mr. Obama came hours after Egypt presented the plan to end a week of heavy fighting that has killed at least 185 people. The proposal marked the first sign of a breakthrough in international efforts to end the conflict.

At the same time, Mr. Obama said the U.S. has been "very clear that Israel has the right to defend itself" against an onslaught of rockets being launched indiscriminately by militants from Gaza into Israel. He also lamented the death and injury of Palestinian civilians in Gaza during Israel's military response to quell the rockets, urging that civilians be protected and warning against further escalation by either side.

The Health Ministry in Gaza said 185 people, including dozens of civilians, have been killed, and more than 1,000 people wounded.

There have been no Israelis killed, although several have been wounded by rocket shrapnel, including two sisters, ages 11 and 13, who were seriously hurt Monday.

Ahead of the Egyptian announcement, there appeared to be no slowdown in the fighting, with Hamas for the first time launching an unmanned drone into Israeli airspace that was shot down.

The Israeli military said 3 rockets were fired at the southern city of Eilat early Tuesday morning, lightly injuring two people and sparking a fire. The military said it did not immediately know who was behind the rocket fire. Previous rocket attacks on Eilat were from radical Islamic militants in the neighboring Sinai Peninsula.

The violence followed the kidnappings and killings of three Israeli teenagers in the West Bank last month, as well as the subsequent kidnapping and killing of a Palestinian teenager in an apparent revenge attack, along with Israeli raids against Hamas militants and infrastructure in the West Bank.

Israeli officials have said the goal of the military campaign is to restore quiet to Israel's south, which has absorbed hundreds of rocket strikes, and that any cease-fire would have to include guarantees of an extended period of calm.

Hamas officials had said they would not accept "calm for calm." The group is demanding an easing of an Israeli-Egyptian blockade that has ground Gaza's economy to a standstill and that Israel release dozens of prisoners who were arrested in a recent West Bank crackdown following the abductions of the Israeli youths.

With the death toll mounting, both sides have come under increasing international pressure to halt the fighting.

Egypt Foreign Minister Sameh Shukri said there is "no alternative but return to the truce" of November 2012, and added that Egypt contacted all the parties, including the Palestinian leadership, different Palestinian factions, and Israeli authorities in addition to Arab and international parties. Such contacts led to shaping up the proposal which called for cease-fire.

"Egypt stresses the international responsibility toward what is happening in Palestine," he said.

In a speech broadcast on Al-Jazeera, Ismail Haniyeh, a Hamas leader in Gaza, confirmed there was "diplomatic movement."

"The problem is not going back to the agreement on calm because we want this aggression to stop," he said. "The siege must stop and Gaza people need to live in dignity."

Egypt, the first Arab state to reach peace with Israel, often serves as a mediator between Israel and Hamas.

In the 2012 fighting, Egypt's then-President Mohammed Morsi brokered a cease-fire, leveraging the influence his Muslim Brotherhood held with Hamas, its ally.

That deal included pledges to ease the blockade - promises that Hamas says were never kept. The blockade has greatly restricted movement through Gaza's Rafah crossing with Egypt - the territory's main gateway to the outside world - while Israel has restricted the flow of many goods, particularly much-needed construction materials, into Gaza. Israel says Hamas can use things like metal and concrete for military purposes.

Hamas has seen its position further weakened by last year's military coup in Egypt that ousted Morsi. Egypt's new leaders have cracked down on Hamas by nearly shuttering a network of smuggling tunnels along the border that were Hamas' key economic lifeline - and supply route for its weapons.

Hamas seized control of Gaza in 2007 from the rival forces of Palestinian President Mahmoud Abbas. With the economy stagnant and Hamas unable to pay the salaries of its thousands of civil servants, the group recently agreed to back a unity government under Abbas' leadership. But Hamas remains in firm control of Gaza.

Israel and Hamas, which is considered a terrorist group by the West, have battled many times. In the latest round, Israel carried out more than 1,300 airstrikes, along with attacks by naval gunships and artillery forces. Hamas fired hundreds of rockets into Israel.

Israeli military officials say the airstrikes knocked out roughly a third of Hamas' rocket supply and delivered a blow to the group. It says that roughly 90 of the dead were wanted militants, and it has accused Hamas of using civilians as human shields.

A Hamas drone launched Monday into Israel marked the Islamic militant group's latest effort to catch the Israeli military off-guard. But like the others, it had little impact on the battlefield.

Israel shot down the drone - named Ababil for a protective flock of birds mentioned in the Quran. Still, the drone represented a new level of sophistication for Hamas, and Israel said it was taking the threat seriously.

It was the first time Hamas has launched a drone into Israel, though military officials say they knew the group has had the technology for some time. Israeli airstrikes in the past have targeted what were believed to be drone facilities in Gaza.

"Hamas is trying everything it can to produce some kind of achievement, and it is crucial that we maintain our high state of readiness," Israeli Defense Minister Moshe Yaalon said. "The shooting down of a drone this morning by our air defense system is an example of their efforts to strike at us in any way possible."

The hundreds of rockets fired by Hamas disrupted life across Israel. But a new Israeli rocket-defense system has intercepted dozens of projectiles headed toward major cities.

Looking to gain an edge, Hamas has employed tactics not seen before. It has fired rockets deeper than ever into Israel, including weapons it has developed and manufactured in Gaza. Last week, Hamas sent a team of scuba divers on an infiltration mission, but Israel quickly detected the frogmen and killed them outside an army base.

Isaac Ben-Israel, a retired Israeli air force general and a former head of the Israeli space agency, said the Hamas drone was similar to aircraft sent by Hezbollah guerrillas in Lebanon during a 2006 war.

He said the drone's capabilities were limited. But "looking to the future, these technologies are becoming more and more available," he told Channel 10 TV.

© 2014 CBS Interactive Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.

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