What they want
ISRAEL: Demands an end to rocket fire from Gaza and a halt to weapons smuggling into Gaza through tunnels under the border with Egypt. It also wants international guarantees that Hamas will not rearm or use Egypt's Sinai region, which abuts both Gaza and southern Israel, to attack Israelis.
HAMAS: Wants Israel to halt all attacks on Gaza and lift tight restrictions on trade and movement in and out of the territory that have been in place since Hamas seized Gaza by force in 2007. Israel has rejected such demands in the past.
Key player: Egypt
Egypt's new Islamist government is expected to play a key role in maintaining a deal. The crisis has thrust Egyptian President Mohammed Morsi into the spotlight as he plays a difficult balancing act. Morsi belongs to the Muslim Brotherhood, Hamas' parent movement, and clearly sympathizes with the Islamic militant group. At the same time, he relies heavily on U.S. aid and is trying to preserve a historic peace agreement with Israel.
The United States considers Hamas, which has killed hundreds of Israelis in suicide and other attacks, to be a terror group and does not meet with its officials. The Obama administration blames Hamas for the latest eruption of violence and says Israel has the right to defend itself. At the same time, it has warned against a ground invasion, saying it could send casualties spiraling.
History of clashes
While violence is a near constant between the Palestinians and the Israelis, there have been several notable protracted clashes between the two in recent history.
December 1987: A clash in the Jebaliya refugee camp in December 1987 sets off a Palestinian uprising, known as the intifada, that lasts until 1993 and claims the lives of more than 2,000 Palestinians and 192 Israelis. The militant Islamic group Hamas is formed early in the uprising.
September 2000: The second Palestinian uprising erupts after Ariel Sharon, then the leader of Israel's opposition, visits the site in East Jerusalem known to Muslims as Haram al-Sharif, and to Jews as Temple Mount, which contains the al-Aqsa mosque. A rising number of suicide bombings leads Israel in June 2002 to begin construction on a security wall. In September 2005, Israel withdraws its troops and 8,500 Jewish settlers from the Gaza Strip.
November 2008: Palestinians resume rocket and mortar fire into Israel after an Israeli incursion. On Dec. 19, Hamas declares the truce over. On Dec. 27, Israel launches an offensive known as Operation Cast Lead. By the time Israel ceased fire on Jan. 18, 2009, more than 1,300 Palestinians and 14 Israelis were dead.