By Maya Gebeily and Laila Bassam
BEIRUT (Reuters) -The United States is spearheading a new diplomatic effort to end hostilities in both Gaza and Lebanon, linking the two conflicts as part of a single initiative, seven sources familiar with the initiative told Reuters.
Details are being discussed at the U.N. General Assembly in New York, according to two Lebanese officials, two Western diplomats, a source familiar with the thinking of the armed Lebanese group Hezbollah, a source in Washington and a further person briefed on the talks.
But as the effort gathered pace, Israel suggested it could add a ground incursion to its expanding campaign of strikes against Hezbollah. Three Israeli officials told Reuters that, although the U.S. and France were working on ceasefire proposals, no significant progress had yet been made.
Nevertheless, it was the first attempt to link the two fronts in a U.S. diplomatic push, the other seven sources said.
The deal would include the eventual release of hostages seized by the Palestinian armed group Hamas in its Oct. 7 attack on Israel, according to a senior Lebanese official, the source familiar with Hezbollah's thinking and the source briefed on talks.
The White House National Security Council did not immediately respond to a request for comment, and the office of Israeli Prime Minister Benjamin Netanyahu declined to comment.
Violence has gripped the region since the Oct. 7 attack by Hamas on communities in southern Israel, in which 1,200 people were killed and 250 taken hostage into Gaza.
The attack prompted an Israeli assault on Gaza that has killed more than 41,000, according to authorities there.
The day after Hamas attacked, Iran-backed Hezbollah fired rockets at Israeli military positions across Lebanon's southern border, saying the attacks were in solidarity with Gaza.
Hezbollah has said it will not stop firing at Israel until the attack on Gaza stops, and repeated efforts by Washington to broker a ceasefire in Gaza and secure the hostages' freedom have failed.
ISRAEL STEPS UP ATTACKS
Israel has now significantly stepped up its military campaign against Hezbollah in Lebanon, launching hundreds of airstrikes and killing several Hezbollah commanders as well as hundreds of other people, according to Lebanese authorities.
Tens of thousands had already fled from both sides of the border since October, and have been joined this week by around half a million fleeing a feared Israeli ground incursion into south Lebanon.
A senior Western diplomat told Reuters that the deal sought by the U.S. would include an Israeli announcement of an end to major hostilities in Gaza, followed by a push for a ceasefire in Lebanon and then a political deal that could see a demarcation of the contentious Israeli-Lebanese land border.
The diplomat said that could provide an "off-ramp" for Hezbollah to avoid a full-scale war with Israel.
The senior Lebanese official and the source familiar with Hezbollah's thinking said Hezbollah was open to any settlement that included both Gaza and Lebanon.
The second Lebanese official said it would be impossible to stop the conflicts without a package that covered both.
In a sign that diplomacy was accelerating, Lebanon's caretaker prime minister, Najib Mikati, on Monday announced an unexpected trip to New York.
'OPPORTUNITY' FOR SETTLEMENT
The conflict in Gaza has been politically costly for Biden - and by extension Vice President Kamala Harris' presidential campaign - and the violence in Lebanon has redoubled pressure on him to find a diplomatic solution.
Biden said on Wednesday an all-out war was possible in the Middle East, but there was also a chance for a broad settlement.
A source in Washington familiar with the issue said talks were taking place on the sidelines of the General Assembly "with the aim of giving an opportunity for a political settlement" on the Lebanese-Israeli border and reviving a hostage deal on Gaza.
But a second U.S. source cautioned that the obstacles to such a complex diplomatic proposal were hefty - and that implementation would be even harder.
French President Emmanuel Macron, the only Western leader to hold talks with Iranian President Masoud Pezeshkian on the sidelines of the General Assembly, asked him on Tuesday to exert his influence on Hezbollah.
French officials have said diplomacy must focus first on a cessation of hostilities, given the complexity of including Gaza in a broader deal for now. Biden and Macron were due to speak on the issue later in the day.
A European diplomat said the success of a wider initiative depended heavily on Netanyahu agreeing to a ceasefire in Gaza, adding: "Good luck with that one, Joe."