HAMAS has rejected a week-long ceasefire offer that Israel hoped would secure the release of the last women and children held captive.
The initial agreement is off the table despite Israel's recent battlefield gains that are bringing them ever-closer to terror boss Yahya Sinwar.
Last night, the head of Hamas's political wing, Ismail Haniyeh, attended secret "intensive" talks in Cairo to discuss a ceasefire agreement and more humanitarian aid.
Israel offered to halt all ground and air assaults in return for 40 hostages that included the last of the women and children as well as elderly male hostages who needed medical treatment.
Egyptian officials said the deal broke down when Haniyeh refused to release any captives until a permanent ceasefire was established, The Wall Street Journal reports.
However, this morning the US said "serious negotiations" were still taking place but the prospects remain uncertain.
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Reports, citing officials in Cairo, stated that Hamas has now rejected any truce that would last less than 14 days.
The negotiators were said to be looking towards a 10-to-1 prisoner for hostage agreement – but Israel wants to first clarify which captives would be released.
It comes as Israel steps up its ground operations in the shattered southern city of Yhan Younis as the hunt down "Gaza's Bin Laden".
Ruthless leader Sinwar, 61, has evaded Israeli capture twice in just days after escaping through the terror network's tunnels in Gaza's "new terror capital", according to sources.
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Israel's defence ministry said they "will not let up in our action there until we get to the senior Hamas officials" as they suggested their net was closing in on Sinwar.
Israeli intelligence said the monster remains constantly on the move to dodge capture and assassination.
And in the heart of Gaza City in the north, the IDF said they have uncovered a tunnel network once used by Hamas's senior leadership which it called an "underground terrorist city".
It said its troops had taken control of the "Elite Quarter" of Gaza's largest city, where Sinwar and other leaders once operated.
Yesterday, Israeli Prime Minister Benjamin Netanyahu once again pledged that Israel will "not stop fighting until Hamas is eliminated" – ruling out any prospect of a permanent ceasefire.
US President Joe Biden said “there’s no expectation at this point” of an impending hostage deal but “we’re pushing it.”
He earlier said on Tuesday that he believed increased military pressure would drag Hamas to the negotiation table.
“I will spare no effort on this, and the demand is to bring everyone [home]," he told the devastated relatives of hostages.
There are 108 hostages still alive in Gaza, including 19 women and two children, according to Israel.
A temporary truce deal in late November saw 105 of the roughly 240 captives returned to Israel before fighting resumed on December 1.
Four hostages were released prior to that, and one hostage rescued by troops.
The bodies of eight hostages have also been recovered, as well as those of three hostages mistakenly killed by the IDF.
Last night's Cairo negotiations for the first time included Hamas ally and fellow Iranian terror proxy, the Palestinian Islamic Jihad, who are demanding that Israel free all of its thousands of Palestinian prisoners.
Militants belonging to the Islamic Jihad also took part in the October 7 massacre in southern Israel and helped take hostages.
Hamas has claimed not all the hostages are under their control, which possibly explains the presence of the Islamic Jihad at the talks in Egypt.
A big concern remains for Israel's youngest hostage, 10-month-old Baby Kfir Bibas and his brother Ariel, 4, and mother Shiri, 32 – who Hamas previously claimed were killed in an Israeli air strike.
Early this month, Israel said it was investigating these claims and has provided no confirmation they are dead.
Now more than 10 weeks old, Israel launched its relentless campaign in the Gaza Strip with the aim of annihilating Hamas after its fighters raided Israel on October 7, killing 1,200 and taking some 240 hostages.
The Hamas-run health authorities in Gaza say that 20,000 have been killed since Israel began its bombardment and invasion of the densely-populated enclave.
Israel disputes these figures – and US President Joe Biden previously said he had “no confidence” in them.
But Benjamin Netanyahu admitted Israel has "not been successful” in reducing civilian casualties.
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It comes as Israel claims Hamas has been using recordings of children screaming "save me, save me!" to lure IDF troops into death traps.
An Israeli government spokesman told The Sun Hamas is waging "psychological warfare" on IDF soldiers on the ground.
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