Israel has agreed to set up a humanitarian corridor in the Gaza Strip, the office of Israeli Prime Minister Ehud Olmert has said.
Israel's military will open up "areas for limited periods of time, during which the population will be able to receive the aid", it said.
The office said the goal was to "prevent a humanitarian crisis".
UN chief Ban Ki-moon has called for an immediate ceasefire, urging swift and decisive action from world leaders.
Egypt proposed a ceasefire at an urgent meeting of the UN Security Council in a move backed by the US.
Israel's ambassador to the UN, Gabriela Shalev, did not say whether Israel would accept the proposal but said it would take it "very, very seriously".
Palestinian health ministry officials say 595 people, including 195 children, have been killed since Israel began its offensive 11 days ago.
An Israeli attack on Tuesday on a school building, which Israel says was sheltering militants, left at least 30 people dead and 55 injured, UN officials say.
Israel, which has vowed to reduce rocket attacks from Gaza on its territory, has lost five soldiers and four civilians.
In another development, Venezuela ordered the expulsion of Israel's ambassador in protest at the Gaza offensive and its "flagrant violations of international law".
Support for truce
Under Israel's corridor proposal, it would suspend attacks in specified parts of Gaza to allow people to stock up on essential goods.
John Ging, of the UN relief agency, said the Israeli offer would be an improvement but the number one priority remained a cessation of the current violence.
Mr Ban said the longer-term issues of Palestinian divisions must be seriously addressed and called for the "urgent continuation of negotiations for a political solution".
"We need urgently to achieve Palestinian unity and the reunification of Gaza with the West Bank within the framework of the legitimate Palestinian Authority," he said.
The ceasefire plan proposed jointly by Egyptian President Hosni Mubarak and French President Nicolas Sarkozy in New York would bring together all the main parties and take all measures to end the conflict in Gaza.
The plan envisages the resumption of the delivery of aid to Gaza and talks with Israel on border security, a key issue for Israel as it says Hamas smuggles its rockets into Gaza via the Egyptian border.
Welcoming the proposal, US Secretary of State Condoleezza Rice called for a "ceasefire that can endure and that can bring real security".
The contours of a possible diplomatic agreement are in place, the BBC's Laura Trevelyan reports from the UN.
However, if Israel continues to control the flow of humanitarian aid into Gaza and can choose to stop it at any time this seems unlikely to command the support of Hamas, she notes.
Thus frenetic diplomacy in New York and in the Middle East is likely to continue.
School carnage
The al-Fakhura school hit by Israeli shell-fire in the Jabaliya refugee camp had been used as a refuge for hundreds of people, UN officials said.
The Israeli military said its soldiers had come under mortar fire from Hamas militants inside the school. A spokesman for Hamas denied there had been any hostile fire coming from the school.
In all, at least 70 Palestinians and five Israeli soldiers were killed on Tuesday.
Israel says its offensive is stopping militants firing rockets but at least five hit southern Israel on Tuesday, injuring a baby.
Casualty claims in Gaza cannot be independently verified. Israel is refusing to let international journalists into Gaza, despite a supreme court ruling to allow a limited number of reporters to enter the territory.
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