By Nidal al-Mughrabi and Alexander Cornwell

CAIRO/TEL AVIV (Reuters) -Hamas said it had responded on Friday in "a positive spirit" to a U.S.-brokered Gaza ceasefire proposal and was prepared to enter into talks on implementing the deal which envisages a release of hostages and negotiations on ending the conflict.

U.S. President Donald Trump earlier announced a "final proposal" for a 60-day ceasefire in the nearly 21-month-old war between Israel and Hamas, stating he anticipated a reply from the parties in coming hours.

Hamas wrote on its official website: "The Hamas movement has completed its internal consultations as well as discussions with Palestinian factions and forces regarding the latest proposal by the mediators to halt the aggression against our people in Gaza.

"The movement has delivered its response to the brotherly mediators, which was characterized by a positive spirit. Hamas is fully prepared, with all seriousness, to immediately enter a new round of negotiations on the mechanism for implementing this framework," the statement said.

In a sign of potential challenges still facing the sides, a Palestinian official of a militant group allied with Hamas said concerns remain over humanitarian aid, passage through the Rafah crossing to Egypt and clarity over a timetable of Israeli troop withdrawals.

Trump said on Tuesday that Israel had agreed "to the necessary conditions to finalize" a 60-day ceasefire, during which efforts would be made to end the U.S. ally's war in the Palestinian enclave.

Israeli Prime Minister Benjamin Netanyahu has yet to comment on Trump's announcement and in their public statements, the two sides remain far apart. Netanyahu has repeatedly said Hamas must be disarmed, a position the militant group, which is thought to be holding 20 living hostages, has so far refused to discuss.

Netanyahu is due to meet Trump in Washington on Monday.

Trump has said he would be "very firm" with Netanyahu on the need for a speedy Gaza ceasefire, while noting that the Israeli leader wants one as well.

"We hope it's going to happen. And we're looking forward to it happening sometime next week," he told reporters earlier this week. "We want to get the hostages out."

ATTACKS OVERNIGHT

Israeli attacks have killed at least 138 Palestinians in Gaza over the past 24 hours, local health officials said.

Health officials at the Nasser Hospital in Khan Younis, southern Gaza, said the Israeli military had carried out an airstrike on a tent encampment west of the city around 2 a.m., killing 15 Palestinians displaced by nearly two years of war.

The Israeli military said troops operating in the Khan Younis area had eliminated militants, confiscated weapons and dismantled Hamas outposts in the last 24 hours, while striking 100 targets across Gaza, including military structures, weapons storage facilities and launchers.

Later on Friday, Palestinians gathered to perform funeral prayers before burying those killed overnight.

"There should have been a ceasefire long ago before I lost my brother," said 13-year-old Mayar Al Farr as she wept. Her brother, Mahmoud, was shot dead in another incident, she said.

"He went to get aid, so he can get a bag of flour for us to eat. He got a bullet in his neck," she said.

'MAKE THE DEAL'

In Tel Aviv, families and friends of hostages held in Gaza were among demonstrators who gathered outside a U.S. Embassy building on U.S. Independence Day, calling on Trump to secure a deal for all of the captives.

Demonstrators set up a symbolic Sabbath dinner table, placing 50 empty chairs to represent those who are still held in Gaza. Banners hung nearby displaying a post by Trump from his Truth Social platform that read, "MAKE THE DEAL IN GAZA. GET THE HOSTAGES BACK!!!"

"Only you can make the deal. We want one beautiful deal. One beautiful hostage deal," said Gideon Rosenberg, 48, from Tel Aviv.

Rosenberg was wearing a shirt with the image of hostage Avinatan Or, one of his employees who was abducted by Palestinian militants from the Nova musical festival on October 7, 2023. He is among the 20 hostages who are believed to be alive after more than 600 days of captivity.

An official familiar with the negotiations said on Thursday that the proposal envisages the return of 10 of the hostages during the 60 days, along with the bodies of 18 others who had been held hostage.

Ruby Chen, 55, the father of 19-year-old American-Israeli Itay, who is believed to have been killed after being taken captive, urged Netanyahu to return from meeting with Trump with a deal that brings back all hostages.

Itay Chen, also a German national, was serving as an Israeli soldier when Hamas carried out its surprise attack on October 7, 2023, killing around 1,200 people, mostly civilians, and taking another 251 hostage.

Israel’s retaliatory war against Hamas has devastated Gaza, which the militant group has ruled for almost two decades but now only controls in parts, displacing most of the population of more than 2 million and triggering widespread hunger.

More than 57,000 Palestinians have been killed in nearly two years of fighting, most of them civilians, according to local health officials.

(Reporting by Alexander Cornwell in Tel Aviv, Nidal al-Mughrabi in Cairo, Hatem Khaled in Gaza and Howard Goller in New York; Editing by Alex Richardson, Philippa Fletcher and Rosalba O'Brien)