His comments follow a row between Ed Miliband and No 10 after the Labour leader said PM David Cameron was "wrong" not to oppose Israel's attacks.
No 10 said it was shocked Mr Miliband would "play politics with such a serious issue".
Thirty Palestinians have been reported killed on Sunday and militants have continued to fire rockets into Israel.
The Foreign Office confirmed that Mr Hammond had spoken to the Israeli foreign minister Avigdor Lieberman and Israeli justice minister Tzipi Livni on the telephone on Sunday.
During that call Mr Hammond said he reiterated the UK's "need for an immediate and unconditional humanitarian ceasefire".
He said: "I welcome indications that Israeli forces may begin to withdraw from Gaza within the next few days."
Mr Hammond also told the Sunday Telegraph the crisis in Gaza could become "an endless loop of violence".
"The British public has a strong sense that the situation of the civilian population in Gaza is simply intolerable and must be addressed - and we agree with them."
In a strongly worded statement on Saturday, Mr Miliband said Mr Cameron had previously been "right to say that Hamas is an appalling terrorist organisation".
"Its wholly unjustified rocket attacks on Israeli citizens, as well as building of tunnels for terrorist purposes, show the organisation's murderous intent and practice towards Israel and its citizens," he said.
"But the prime minister is wrong not to have opposed Israel's incursion into Gaza and his silence on the killing of hundreds of innocent Palestinian civilians caused by Israel's military action will be inexplicable to people across Britain and internationally."
On Sunday Mr Miliband reiterated that criticism, telling the BBC the government needed to send "a much clearer message to Israel that its actions in Gaza are unacceptable and unjustifiable".
"What I want to hear from David Cameron is that he believes Israel's actions are wrong and unjustified and we haven't heard that from him."
He said rocket attacks on Israel by Palestinian militants "cannot excuse the scale of the loss of life of innocent Palestinian civilians including children that we are seeing".
The aim should be to "force both sides to have a ceasefire and the long-term solution we need", he said.
Downing Street said: "The PM has been clear that both sides in the Gaza conflict need to observe a ceasefire.
"We are shocked that Ed Miliband would seek to misrepresent that position and play politics with such a serious issue."
Some 1,700 Palestinians, mostly civilians, have been killed since the conflict began more than three weeks ago.
A total of 66 Israelis have died, all but two of them soldiers. A Thai worker in Israel also died.
A UN-brokered humanitarian ceasefire, intended to last 72 hours, ended on Friday after less than five hours, with each side blaming the other.
Israel says it is defending itself from attacks by Palestinian militants and blames Hamas for civilian deaths in Gaza, saying fighters deliberately operate from civilian areas.
Critics of Israel's actions say Gaza is so densely populated any conflict there will inevitably affect civilian areas and cause civilian casualties.
The situation in Gaza is "simply intolerable and must be addressed", Foreign Secretary Philip Hammond says.