An Israeli official said that Egypt has proposed to both Tel Aviv and Hamas to move forward with a new agreement, involving the release of Israeli hostages held in Gaza.

"The Egyptian proposal is expected to be discussed on Monday during the meeting of the war cabinet," Israeli news website Walla quoted an unnamed senior Israeli official as saying.

"The proposal is initial and fresh but important and positive," the official said on Sunday, claiming that "Cairo has significant leverage over Hamas, which may help in the success of a proposal to release the Israeli hostages in Gaza".

Egypt, along with Qatar, helped mediate a weeklong ceasefire in November in which Hamas freed over 100 hostages in exchange for Israel’s release of 240 Palestinian prisoners. Hamas and other groups are still holding about 129 captives.

Hamas has repeatedly rejected any talks on exchange deal with Israel before a complete ceasefire in Gaza and the withdrawal of Israeli forces from the besieged Palestinian enclave.

Israel has pounded Gaza since a cross-border attack by Hamas on October 7, killing at least more than 20,400 Palestinians, mostly women and children, and injuring many others.

Around 1,200 Israelis are believed to have been killed in the Hamas attack.

The Israeli onslaught has left Gaza in ruins, with half of the coastal territory's housing damaged or destroyed and nearly 2 million people displaced within the densely-populated enclave amid shortages of food, water and medicines.

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