Palestine resistance movement Hamas is said to have rejected an Israeli proposal for a six-week ceasefire in Gaza which called for the armed group to give up its weapons.
A senior Palestinian official familiar with the talks said the plan gave no commitment to end the war or for an Israeli troop pull-out - key Hamas demands - in exchange for releasing half of the living hostages which it holds.
It comes as Israel continues its military offensive in Gaza, BBC reported.
A security guard was killed and nine other people were injured in an air strike on a field hospital in Khan Younis, the hospital said. The Israel Defense Forces (IDF) did not immediately comment.
A UN agency meanwhile warned that "the humanitarian situation in Gaza is now likely the worst it has been in the 18 months since the outbreak of hostilities".
It is six weeks since Israel allowed any supplies to enter through crossings into the Palestinian territory - by far the longest such stoppage to date.
UN agencies strongly refute Israel's claim that there is enough food in Gaza to last for a long time and suggest the blockade could breach international humanitarian law.
Israel's prime minister said the block on supplies was aimed at pressuring Hamas to release hostages and to extend the ceasefire which expired on March 1.
At the same time, the UN's humanitarian affairs office stated: "Partners on the ground report a surge in attacks causing mass civilian casualties and the destruction of some of the remaining infrastructure that's needed to keep people alive."
Israel is said to have submitted its latest ceasefire proposal to regional mediators late last week, just days after Prime Minister Benjamin Netanyahu met US President Donald Trump in Washington.
A Hamas delegation headed by chief negotiator Khalil al-Hayya then met Egyptian intelligence officials in Cairo.
The senior Palestinian official told the BBC: "The Israeli proposal relayed to the movement through Egypt explicitly called for the disarmament of Hamas without any Israeli commitment to end the war or withdraw from Gaza. Hamas therefore rejected the offer in its entirety."
It is understood to be the first time that Israel has added Hamas disarmament as a condition for advancing a ceasefire - a red line for the group.
The Palestinian official accused Israel of stalling for time, seeking only to retrieve the hostages while prolonging the war.
It is believed that 59 hostages remain in Gaza, of whom 24 are alive.
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