A semblance of normal life returned to Gaza on Tuesday as a 72-hour truce entered its second day and negotiators sat down in Cairo to seek a permanent end to the bloodshed.

Gaza has been quiet following days of Egyptian-brokered mediation to stem violence which has killed 1,940 Palestinians and 67 on the Israeli side since July 8.

Egyptian intelligence mediators in Cairo threw themselves back into shuttle diplomacy that unravelled after rocket attacks breached the previous 72-hour truce on Friday.

With no reports of violations on either side since midnight on Sunday, shops and businesses started to reopen and people ventured onto the streets of the war-torn coastal region, which is home to 1.8 million Palestinians.

Outside a UN-run school, a clutch of cars and donkey carts waited to take some refugees back to homes they had fled during the month of fighting.

"We want to go back to see what happened to our house," said Hikmat Atta, 58, who piled his family into a small cart to visit their home in the northern town of Beit Lahiya.

But, with the second truce in a week still in its early stages, he was not taking any chances.

"We're just going back for the day, at night we'll come back here," he told AFP.

Palestinian emergency services said that a one-month-old baby girl died on Monday of injuries sustained during the fighting, raising the overall death toll in Gaza to 1,940.

In Cairo, Egyptian intelligence mediators were locked in talks with the Palestinian delegation.

They were to relay Palestinian demands to Israeli negotiators, who returned to Egypt three days after quitting when rocket attacks resumed on southern Israel.

Egypt has urged the warring sides to use the new lull to reach "a comprehensive and permanent ceasefire", after efforts to extend a similar truce last week collapsed into a firestorm of violence.

Cairo hopes to conclude a "permanent and comprehensive" ceasefire deal in the Gaza Strip to pave the way for the entrance of humanitarian aid and reconstructing the war-torn coastal enclave.

James Rawley, the top UN humanitarian official for the Palestinian territories, said Israel's security concerns must be addressed but warned that without ending the blockade another conflict was likely.

"Not only will we see very little in the way of reconstruction, but I am afraid that the conditions are in place for us to have another round of violence," he told AFP.

Palestinian delegates in Cairo said they would be happy for president Mahmud Abbas's Palestinian Authority to take over the reconstruction of Gaza and execute any agreement reached in Cairo.

The Humanitarian Relief Foundation, a Turkish aid group, said it would send a new flotilla of ships in a bid to break Israel's eight-year blockade on Gaza.

Four years ago, the group sent a six-ship flotilla to Gaza which was stormed by Israeli commandos, leaving 10 Turkish nationals dead and triggering a major diplomatic crisis with Ankara.

*This article has been edited by Ahram Online.