Israeli leaders were preparing for military operations in Gaza’s southern city of Rafah, where most of the Palestinian territory’s population has fled after six months of fighting, AFP reports.

Talks in Cairo aimed at brokering a truce have made “significant progress”, with more negotiations expected in the coming days, Egyptian state-linked outlet Al-Qahera reported Monday.

Israel pulled its forces out of the southern Gaza Strip on Sunday.

But Israel’s Defence Minister Yoav Gallant said troops had left the city of Khan Younis “to prepare for future missions, including… in Rafah”.

Prime Minister Benjamin Netanyahu said Israel was “one step away from victory”.

After troops left areas in and around the largely destroyed Khan Younis, a stream of displaced Palestinians walked there, hoping to return to their homes from temporary shelters in Rafah, a little further south.

Muhammad Younis, 51, a Palestinian in northern Gaza, saw nothing but loss.“Isn’t the bombing, death and destruction enough?” he asked. “There are bodies still under the rubble. We can smell the stench.”