Channel 10 said the security cabinet had agreed to prolong a 12-hour truce that went into effect on Saturday morning by four hours, extending it until midnight local time (2100 GMT).
The decision came after US secretary of state John Kerry and foreign ministers from Europe and the Middle East urged Israel and the Hamas movement to extend the fragile truce.
"We all call on parties to extend the humanitarian ceasefire," France's Foreign Minister Laurent Fabius told reporters after meeting Kerry and foreign ministers from Britain, Germany, Italy, Qatar and Turkey, as well as an EU representative.
"We all want to obtain a lasting ceasefire as quickly as possible that addresses both Israeli requirements in terms of security and Palestinian requirements in terms of socio-economic development."
READ ALSO: 85 bodies recovered from Gaza rubble
There was no immediate response from Hamas to either that call or to the Israeli cabinet decision.
US secretary of state John Kerry (third from left), stands with (from left) Qatari foreign minister Khaled al-Attiyah, Turkish foreign minister Ahmet Davutoglu, french foreign minister Laurent Fabius, British foreign secretary Philip Hammond, German foreign minister Frank-Walter Steinmeier and Italian foreign minister Federica Mogherini after their meeting regarding a ceasefire between Hamas and Israel in Gaza on July 26, 2014. (AP photo)
After the 12-hour ceasefire went into effect at 0500 GMT, medics in Gaza began digging through the remains of hundreds of homes, and uncovered more than 100 bodies, medics said.
This baby was delivered from her dead mother's body - watch @BBCiPannell's report from #Gaza http://t.co/AXPf1MFX8q http://ift.tt/1zdKOA5
— BBC News (World) (@BBCWorld) July 25, 2014
The grim discoveries pushed the Palestinian toll in Gaza to more than 1,000 as Kerry met his counterparts from Europe and the Middle East and urged a truce extension.
Israel also announced the deaths of three more soldiers, raising its military toll to 40, along with two Israeli civilians and a Thai worker killed in Israel.
A Palestinian woman cries upon her return during a 12-hour ceasefire to the family house destroyed by Israeli strikes in Beit Hanoun, northern Gaza Strip on July 26, 2014. (AP photo)
On the ground, Palestinian ambulances sped into Gaza neighbourhoods that have been too dangerous to enter for days.
Palestinians ventured onto Gaza's streets after the truce began, some eager to check homes they had fled, others to stock up on supplies while it was safe to do so.
In many places they found astonishing devastation: buildings levelled, entire blocks of homes completely wiped out by Israeli bombardment.
In northern Beit Hanun, even the hospital was badly damaged by shelling, and AFP correspondents came across the charred body of a paramedic as emergency workers searched for more dead.
A Palestinian man cries upon his return during a 12-hour ceasefire to the family house destroyed by Israeli strikes in Beit Hanoun, northern Gaza Strip on July 26, 2014. (AP photo)
There were similar scenes in Shejaiya, where stiff bodies lay on the floor of a room in one building, one caked in dried blood, all of them covered in dust.
'Humanitarian window'
East of southern Khan Yunis, residents hesitated to enter the Khuzaa neighbourhood, saying Israeli forces remained inside the border area.
And in nearby Bani Suheila, where 20 people were killed in a single Israeli air strike shortly before the truce began, women and children wept as they discovered their homes destroyed.
Hamas and Israel agreed to the "humanitarian window" early on Saturday, after Israel's security cabinet on Friday night rejected a US proposal for a seven-day truce during which the two sides would negotiate a longer-term deal. Speaking after the rejection, at a news conference in Cairo with UN chief Ban Ki-moon, Kerry said Israel and Hamas "still have some terminology" to agree to on a ceasefire, but added they had "fundamental framework" on a truce.
An Israeli soldier kisses his mother next to a Merkava tank stationed at an army deployment along the border between Israel and the Hamas-controlled Gaza Strip on July 25, 2014. (AFP photo)
The two sides remain at odds over the shape of a final deal to end the fighting, however.
Hamas says any truce must include a guaranteed end to Israel's eight-year blockade of Gaza, while in Israel there are calls for any deal to include the demilitarisation of the Gaza Strip.
West Bank tensions
The situation in Gaza has created tensions in the West Bank, where protests against Israel's role in the conflict erupted after Friday prayers.
Troops shot dead two Palestinian teenagers early Saturday in separate clashes in the north and south of the West Bank.
That followed the deaths of six Palestinians on Friday — five shot dead by Israeli troops and one killed by an Israeli settler.
A Palestinian man inspects the rubble of a house east of Khan Yunis in the southern Gaza Strip on July 26, 2014. (AFP photo)
International concern has mounted over the number of civilians killed in Gaza, including in a Thursday attack in which at least 15 people were killed in alleged Israeli shelling of a UN school.
The facility was sheltering some of the 100,000 Palestinians who have fled their homes during the fighting.
Rights groups say about 80 percent of the casualties have been civilians, and the UN agency for children Unicef said on Friday that 192 children had been killed during the conflict.
The Israeli army announced the deaths of three soldiers in Gaza killed Saturday morning before the truce began.
Rocket fire from Gaza continued on Saturday before the truce, with three shot down by anti-missile defences and one hitting open ground, the army said.
It said militants fired 60 rockets into southern Israel on Friday, with another 15 intercepted.
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