By Nidal al-Mughrabi

CAIRO/DOHA (Reuters) -Prospects for a Gaza ceasefire appeared slim on Sunday as Hamas reiterated its demand for an end to the war in exchange for the freeing of hostages, and Israeli Prime Minister Benjamin Netanyahu flatly ruled that out.

The two sides blamed each other for the impasse and the Hamas delegation said it would leave Cairo truce talks on Sunday night to consult with its leadership. However, the Hamas officials planned to return to the Egyptian capital on Tuesday, two Egyptian security sources said.

In their second day of talks with Egyptian and Qatari mediators, Hamas negotiators maintained their stance that any truce agreement must end the war, Palestinian officials said.

Israeli officials have not travelled to Cairo to take part in indirect diplomacy, but on Sunday Netanyahu reiterated Israel’s aim since the start of the war nearly seven months ago: to disarm and dismantle the Palestinian Islamist movement Hamas for good or else endanger Israel’s future security.

The prime minister said Israel was willing to pause fighting in Gaza in order to secure the release of hostages still being held by Hamas, believed to number more than 130.

“But while Israel has shown willingness, Hamas remains entrenched in its extreme positions, first among them the demand to remove all our forces from the Gaza Strip, end the war, and leave Hamas in power,” Netanyahu said. “Israel cannot accept that.”

One official briefed on the talks told Reuters: “The latest round of mediation in Cairo is near to collapse.”

Israeli Defence Minister Yoav Gallant said Hamas seemed not to be serious about reaching a truce.

“We are observing worrying signs that Hamas does not intend to reach an agreement with us,” Gallant said. “This means strong military action in Rafah will begin in the very near future, and in the rest of the Strip.”

In a statement released shortly after Netanyahu’s, Hamas chief Ismail Haniyeh said the group was still keen on reaching a comprehensive ceasefire that ends the Israeli “aggression”, guarantees Israel’s withdrawal from Gaza, and achieves “a serious” deal to free Israelis being held hostage in exchange for the release of Palestinian prisoners.

Haniyeh blamed Netanyahu for “the continuation of the aggression and the expansion of the circle of conflict, and sabotaging the efforts made through the mediators and various parties”.

Qatar, where Hamas has a political office, and Egypt are trying to mediate a follow-up to a brief November ceasefire, amid international dismay over the soaring death toll in Gaza and the plight of its 2.3 million inhabitants.

The war began after Hamas stunned Israel with a cross-border raid on Oct. 7 in which 1,200 people were killed and 252 hostages taken, according to Israeli tallies.

More than 34,600 Palestinians have been killed, 29 of them in the past 24 hours, and more than 77,000 have been wounded in Israel’s assault, according to Gaza’s health ministry. The bombardment has devastated much of the coastal enclave and caused a humanitarian crisis.

RAFAH ASSAULT

Israel has been warning for months it plans to send troops into Rafah, the southern city bordering Egypt where more than a million displaced Gaza residents have taken refuge. Israel believes thousands of Hamas fighters are holed up in the city, along with potentially dozens of hostages.

Such an incursion would put hundreds of thousands of lives at risk and be a huge blow to the aid operations of the entire enclave, the U.N. humanitarian office said on Friday.

Residents and health officials in Gaza said Israeli planes and tanks continued to pound areas across the Palestinian enclave overnight, killing and wounding several people.

Hamas’ armed wing claimed responsibility for an attack on Sunday on the Kerem Shalom crossing between Israel and Gaza, which Israeli and Palestinian media reports said had resulted in Israeli casualties.

Washington – which, like other Western powers and Israel, brands Hamas a terrorist group – has urged Hamas to enter a deal.

CIA Director William Burns – who had been in Cairo – is traveling to Doha to hold an emergency meeting with Qatar’s prime minister, an official briefed on the talks said late on Sunday.

“Burns is on his way to Doha for an emergency meeting with the Qatari Prime Minister aimed at exerting maximum pressure on Israel and Hamas to continue negotiating,” the source added.

Although the two sides remain deadlocked over the issue of an end to the war, Israel has given a preliminary nod to terms that one source said included the return of between 20 and 33 hostages in exchange for the release of hundreds of Palestinian prisoners and a truce of several weeks.

That would leave around 100 hostages in Gaza, some of whom Israel says have died in captivity. The source, who asked not to be identified by name or nationality, told Reuters their return may require an additional deal.

(Reporting and writing by Nidal al-Mughrabi and Maytaal AngelEditing by Frances Kerry and Nick Macfie)