A plan to create a new foothold in Gaza for the Palestinian Authority and to bring in international monitors was being drawn up by diplomats yesterday as a UN ceasefire call was dismissed by both sides.

The plan would allow a return of the authority, led by the secular Fatah faction, to the territory 18 months after it was expelled by the Islamist Hamas. Diplomats are considering taking a triangle at the southern end of Gaza, including the Rafah crossing to Egypt and the Kerem Shalom crossing to Israel, to be policed by Turkish and French military monitors to stop arms smuggling into Gaza.

The zone would nominally be controlled by the authority, the internationally recognised Government. Such a plan would allow the crossings to reopen for the first time since Hamas seized power in Gaza in June 2007.

The plan is being negotiated as part of the Egyptian peace initiative, announced by President Mubarak after talks with President Sarkozy of France, which calls for an immediate ceasefire to be followed by talks on securing the Gaza-Egypt border and reopening the crossings.

It faces formidable obstacles. Diplomats said yesterday that the Egyptian efforts were getting bogged down because of disagreements over how to secure the border. Hamas has said it would consider allowing observers at the border crossings with Egypt but opposes an international force. It also claimed yesterday that a delegation of three Hamas leaders had crossed the border into Egypt to join talks.

Israel, however, is insisting on a robust international force to destroy smuggling tunnels under the border.

Egypt, for its part, does not want international troops on its territory. Instead, Cairo wants to revive the 2005 agreement on movement and access, under which EU monitors oversaw the passage of people through the Rafah crossing and vehicles through Kerem Shalom, a deal that fell through when Hamas came to power. The new plan came as the UN ceasefire proposal was flatly rejected almost as soon as the Security Council backed it 14-0, with the US abstaining.

The US had been expected to back the UN resolution but abstained at the last minute. Diplomats said Condoleezza Rice, the Secretary of State, changed her position after a call from President Bush.

Yesterday F16s continued to fire missiles at houses and apartment blocks in Gaza City, and the air reverberated with artillery fire. The fire was not all one way, though. Rockets repeatedly streaked out of Gaza towards the settlements of Sderot, Beersheba and Ashkelon just across the border.

Ehud Olmert, the Israeli Prime Minister, said: “Israel has never agreed for any outside influence to decide on its right to defend its citizens. The firing of rockets this morning only goes to show that the UN decision is unworkable and will not be adhered to by the murderous Palestinian organisations.”

Israel’s rejection of the resolution was no surprise. The offensive against Hamas is hugely popular: a poll in the Maariv newspaper showed 91 per cent of Israelis supporting it. “This is the time to back the commanders, soldiers and pilots working day and night to conduct a difficult, complex and entirely just war,” Ari Shavit, of the left-of-centre Haaretz newspaper, said.