Israel, like Egypt, views Hamas as a security threat and wants guarantees that any removal of border restrictions will not result in militant groups obtaining weapons.
A senior Palestinian official in Gaza said sticking points to an agreement in the Cairo talks have been Hamas's demands to build a seaport and an airport, which Israel wants to discuss only at a later stage.
Israel has called for the disarming of militant groups in the enclave. Hamas has said that laying down its weapons is not an option.
Punctuated by several temporary ceasefires, the scale of fighting had diminished greatly since Israel pulled its ground troops out of Gaza two weeks ago and it had seemed there was little appetite on either side for the war to drag on.
However, Netanyahu said on Monday the Israeli military was prepared to take "very aggressive action" if shooting against Israel resumed.