High-level talks in Cairo aimed at securing a cease-fire and hostage deal to temporarily end the 10-month Israel massacre on Palestinians in Gaza concluded Sunday without a final agreement, a U.S. official said.

However, discussions will continue at lower levels in the coming days to address the remaining gaps.

The official, who spoke on condition of anonymity, noted that "working teams" will remain in Cairo to work with mediators from the U.S., Qatar and Egypt to resolve outstanding issues.

The official described the talks, which began Thursday and continued through Sunday, as "constructive," with all parties focused on reaching a final, implementable agreement.

The talks included CIA Director William Burns and David Barnea, the head of Israel’s Mossad intelligence agency.

A Hamas delegation was briefed by Egyptian and Qatari mediators but did not directly take part in the negotiations.

The development came after Israel and the Lebanese group Hezbollah traded heavy fire early Sunday but avoided escalating into a widely feared all-out war, as both sides indicated their most intense exchange in months was over.

Hezbollah claimed to have hit an Israeli military intelligence site near Tel Aviv with a barrage of hundreds of rockets and drones.

Israel said its strikes were preemptive measures to avert a larger attack, though neither side provided evidence.

Hezbollah leader Hassan Nasrallah said the attack, a response to Israel’s killing of a top militant commander in Beirut last month, had been delayed to allow for the Gaza cease-fire talks and to give Iran-backed groups time to discuss a coordinated attack on Israel.

Israeli and U.S. military deployments also played a role.

"We will now reserve the right to respond at a later time" if the results of Sunday’s attack aren’t sufficient, Nasrallah said, adding that allied Houthi rebels in Yemen – and Iran itself – had yet to respond.

He told the Lebanese people: "At this current stage, the country can take a breath and relax."

Israel and Hezbollah said they targeted only military sites. Israel claimed no military targets were hit by Hezbollah, but one soldier with its navy was killed, and two others were wounded either by an interceptor for incoming fire or by shrapnel.

Israeli Prime Minister Benjamin Netanyahu said the military had eliminated thousands of rockets aimed at northern Israel and had intercepted drones heading for the center of the country.

"I repeat – this is not the end of the story," he added.

Air raid sirens were reported throughout northern Israel, and Israel’s international airport closed and diverted flights for about an hour.

Israel’s military spokesperson, Rear Adm. Daniel Hagari, said about 100 Israeli planes struck 270 targets, 90% of them rocket launchers aimed at northern Israel.

He said they were investigating the percentage of incoming rockets and drones intercepted but noted that the "vast majority" were thwarted.

Hezbollah said its attack involved more than 320 Katyusha rockets aimed at multiple sites in Israel and a "large number" of drones.

Some Israelis were shaken. In the northern city of Acre, retired teacher Saadia Even Tsur, 76, said he was at the synagogue and arrived home five minutes after his bedroom was damaged. "I went up and saw the size of the miracle that happened to me," he said. A window was broken and debris was on the bed.

Lebanon’s caretaker Economy Minister Amin Salam, after an emergency government meeting, said officials were "feeling a bit more optimistic" about de-escalation after both sides confirmed that the operations had ended.

U.S. President Joe Biden is "closely monitoring events in Israel and Lebanon," according to Sean Savett, a spokesperson for the National Security Council.

The Pentagon said Defense Secretary Lloyd Austin spoke with his Israeli counterpart, Yoav Gallant, and ordered both U.S. carrier strike groups in the region to remain.

The U.S. military has been building up its forces across the region in recent weeks.

The chairperson of the Joint Chiefs of Staff, Gen. C.Q. Brown, arrived in Israel late Sunday for meetings on what the Israeli military called "joint preparations in the region as part of the response to threats in the Middle East."

Danny Citrinowicz, an expert at Israel’s Institute for National Security Studies, said Hezbollah might be trying to "balance the equation without escalating into war." Each side hopes their narrative will be sufficient for them to declare victory and avoid a wider confrontation, he said.

Hezbollah began attacking Israel almost immediately after the start of the latest conflict in Gaza, which was triggered by Hamas’ Oct. 7 incursion on southern Israel.

Israel and Hezbollah have exchanged fire almost daily, displacing tens of thousands of people on both sides of the border.

Hezbollah, which fought Israel to a stalemate in 2006, is believed to be far more powerful now.

The U.S. and Israel estimate it has about 150,000 rockets and is capable of hitting anywhere inside Israel.

The group has also developed drones capable of evading Israel’s defenses, as well as precision-guided munitions.

Israel has vowed a crushing response to any major Hezbollah attack.

It has an extensive multi-tiered missile defense system and is backed by a U.S.-led coalition that helped it shoot down hundreds of missiles and drones fired from Iran earlier this year.

Hezbollah is a close ally of Iran, which has also threatened to retaliate against Israel for the killing of senior Hamas leader Ismail Haniyeh in Tehran last month.

Israel has not said whether it was involved.

Iranian state media touted the Hezbollah attack as a success, but there was no immediate comment from Iranian officials.

The U.S. and other mediators view a cease-fire in Gaza as crucial to preventing a wider Middle East war.

Hezbollah has said it will halt its strikes on Israel if a ceasefire is reached.

In the occupied West Bank, Israel's military said it killed two people who allegedly tried to run over soldiers in Ariel, slightly injuring one.