Hamas says it has approved a proposal for a ceasefire in the seven-month Gaza war put forward by mediators Qatar and Egypt, although Israel said the proposal fell short of its demands.

“Ismail Haniyeh, head of the political bureau of Hamas movement, conducted a telephone call with the prime minister of Qatar, Sheikh Mohammed bin Abdulrahman Al Thani, and with the Egyptian intelligence minister, Mr Abbas Kamel, and informed them of Hamas’s approval of their proposal regarding a ceasefire agreement,” the Palestinian group said in a statement published on its official website on Monday.

Prime Minister Benjamin Netanyahu’s office said the proposed deal did not meet Israel’s demands and that it would send a delegation to meet with negotiators.

“Although the Hamas proposal is far from Israel’s necessary requirements, Israel will send a working delegation to the mediators to exhaust the possibility of reaching an agreement under conditions acceptable to Israel,” it said in a post on X.

Full details of the proposal were not immediately clear.

Three phases

Khalil al-Hayya, a member of Hamas’s political bureau, told Al Jazeera Arabic that the Qatari-Egyptian proposal includes a withdrawal of Israeli forces from Gaza and a return of displaced Palestinians to their homes, as well as an exchange of Israeli captives and Palestinian prisoners.

The proposal includes a three-stage truce, each phase lasting 42 days, according to al-Hayya.

In the first phase, indirect negotiations through mediators will resume on the exchange of captives and prisoners. A withdrawal of some Israeli troops from certain areas will also take place, as well as the unhindered return of displaced families to their homes, and the flow of aid, fuel and relief materials into Gaza, he said.

In the second phase, al-Hayya said, there would be a complete and permanent halt to military activity in Gaza.

The final phase would focus on beginning reconstruction in post-war Gaza, overseen by Egypt, Qatar, and United Nations agencies, he said.

“The ball is now in Israel’s court”, he said.

US State Department spokesperson Matthew Miller said Washington will “withhold judgement” on Hamas’s announcement until it has time to fully review it.

“I can confirm that Hamas has issued a response. We are reviewing that response now and discussing it with our partners in the region,” he said.

“It’s something that is a top priority for everyone in this administration from the president on down,” Miller said.

Hamas’s statement was released after Israeli forces struck sites in the city of Rafah in the southern Gaza Strip after Israel ordered tens of thousands of people to evacuate. More than 1.4 million displaced Palestinians have sought shelter in the area.

Later on Monday, Israel said its war cabinet had approved continuing a military operation in the city.

“The war cabinet unanimously decided that Israel continue the operation in Rafah to exert military pressure on Hamas in order to advance the release of our hostages and the other goals of the war,” Netanyahu’s office said.

Palestinians in Rafah ‘optimistic’

Al Jazeera’s Tareq Abu Azzoum, reporting from Rafah, said people started celebrating near the Kuwaiti Hospital upon hearing the Hamas announcement.

“Everyone … is happy because they believe a Rafah invasion will bring an unspeakable humanitarian catastrophe,” Abu Azzoum said. “Now they are so optimistic.”

The announcement brought “a sense of relief and tranquility” among Palestinians who are “exhausted and traumatised”, he said.

A displaced Palestinian in Rafah told Al Jazeera that he hopes he will be able to go back home.

“We hope we return to our homes. … I am from Gaza [City] itself,” he said.

Al Jazeera’s Alan Fisher, reporting from Washington, DC, said “the Israelis have said they will conduct the war how they see fit”.

“Whether the US expresses concern or anger, it has made no difference to how the Israelis are conducting this war,” Fisher said.

Alon Liel, former director general of Israel’s Ministry of Foreign Affairs, told Al Jazeera that there is “strong pressure” on the Israeli government to send ground troops into Rafah.

“The mood here is very, very different than the mood in Gaza. Even if we have a deal, many people here will be frightened and think that we lost the war,” Liel said.

If Netanyahu accepts the deal, Liel said, it might be “the end of his political career”. And if he does not accept the deal, “we will have international calls by the UN and … sanctions”, he said.

At least 34,735 people, mostly women and children, have been killed and 78,018 wounded in Israel’s assault on Gaza since October, according to Palestinian authorities. The offensive has destroyed much of Gaza and a near-total siege has pushed parts of it on the brink of famine.

Israel launched the assault after Hamas led an attack on southern Israel on October 7, killing at least 1,139 people, according to an Al Jazeera tally based on Israeli statistics.