David Gritten
Antony Blinken was speaking as a Hamas delegation discussed the new proposal with mediators from Egypt and Qatar.
A source close to the talks told the BBC they were cautiously optimistic.
The proposal includes a 40-day truce in return for the release of hostages and the prospect of displaced families being allowed back to northern Gaza.
It reportedly also involves new wording on restoring calm meant to satisfy Hamas's demand for a permanent ceasefire.
The Hamas delegation has now left Cairo and will return with a written response to the proposal, Egypt's state-affiliated Al Qahera TV said.
The Israeli government is coming under growing pressure from its global allies and the families of the hostages to agree a deal.
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