Tel Aviv/Gaza City - A fragile ceasefire in Gaza held for a second night as Israel withdrew more troops and was expected to complete its pullout by Tuesday afternoon.

No rockets landed in Israel during the night and Israel carried out no retaliatory attacks, a military spokesman in Tel Aviv said, saying the last rocket was fired from Gaza at around 5 pm (1500 GMT) Sunday.

"We are continuing with the gradual withdrawal," the spokesman said, noting that some forces still remained in the strip. If the truce holds, Israel may finalize the pullout by the inauguration of US President-elect Barack Obama.

The ceremony was scheduled to start at 5 pm Middle Eastern time. Military officials however would not confirm the deadline.

Cairo - Egypt has invited Israeli government officials and representatives of Palestinian groups from Gaza to Cairo for talks aimed at turning the ceasefire in Gaza into a more lasting truce.

Egypt will hold parallel talks with the Israelis and the Palestinians in Cairo on January 22, Foreign Ministry spokesman Hossam Zaki said in a press release Monday.

There was no indication the Israelis and Palestinians would meet face-to-face.

Zaki said Egypt would press both sides to accept the terms of the initiative to end fighting in the Gaza Strip that President Hosny Mubarak presented on January 6.

The Egyptian president arrived in Kuwait on Monday for a long- scheduled Arab economic summit.

Gaza City

Gaza City/Tel Aviv - Israel pulled more troops out of Gaza overnight, as a fragile truce which ended three weeks of deadly and destructive attacks in the strip entered its second day Monday.

"We are continuing to dilute the forces," a military official told Deutsche Presse-Agentur dpa.

Reserve soldiers who had pulled out, however, were not yet being released and remained on high alert.

Gazans and Israelis meanwhile woke up after a relatively quiet night, with the military official saying no rockets landed in southern Israel and the military carrying out no air-strikes in response.

Sharm el-Sheikh, Egypt - German Chancellor Angela Merkel, attending the Sharm el-Sheikh summit on the Gaza crisis, called Sunday for an end to weapons smuggling into the Gaza Strip.

London - International envoy to the Middle East Tony Blair emphasized the continued need to move toward a two-state solution in order to maintain the peace in Gaza, in a Sunday interview with the BBC.

Blair, a former British prime minister, said that there needed to be "a truly credible process" for establishing the two states.

"Even the short-term is fragile and the long-term sustainability of this depends absolutely and intimately on re-vitalising the whole of the peace process," he told BBC Radio
4's The World This Weekend.