Hamas said early on Tuesday Israel's proposal that it received from Qatari and Egyptian mediators did not meet any of the demands of Palestinian factions.
However, the group added in a statement it would study the proposal, which it described as “intransigent”, and deliver its response to the mediators.
A Hamas official told Reuters on Monday that the group has rejected the Israeli ceasefire proposal made at talks in Cairo, and Israeli Prime Minister Benjamin Netanyahu said a date was set for an invasion of Rafah, Gaza's last refuge for displaced Palestinians.
Israel and Hamas sent teams to Egypt on Sunday for talks that included Qatari and Egyptian mediators as well as CIA Director William Burns.
Burn's presence underlined rising pressure from Israel's main ally the US for a deal that would free Israeli hostages held in Gaza and get aid to Palestinian civilians left destitute by six months of conflict.
But senior Hamas official Ali Baraka told Reuters: "We reject the latest Israeli proposals that the Egyptian side informed us of. The politburo met today and decided this."
Another Hamas official had earlier told Reuters that no progress had been made in the negotiations.
"There is no change in the position of the occupation (Israel) and therefore, there is nothing new in the Cairo talks," the Hamas official, who asked not to be identified, told Reuters. "There is no progress yet."
Israel said it was keen to reach a prisoners-for-hostages deal, by which it would free a number of Palestinians jailed in its prisons in return for the hostages in Gaza, but it wasn't ready to end the military offensive before it invaded Rafah.
Hamas wants any agreement to secure an end to Israeli military offensive, get Israeli forces out of Gaza and allow the displaced to return to their homes across the enclave.
Operations in Rafah
Rafah is the last refuge for Palestinian civilians displaced by relentless Israeli bombardments that have flattened their home neighborhoods. It is also the last significant redoubt of Hamas combat units, Israel says.
More than one million people are crammed into the southern city in desperate conditions, short of food, water and shelter, and foreign governments and organizations have urged Israel against storming Rafah for fears of a bloodbath.
"We are constantly working to achieve our goals, first and foremost the release of all our hostages and achieving a complete victory over Hamas," Netanyahu said.
"This victory requires entry into Rafah and the elimination of the terrorist battalions there. It will happen - there is a date." He did not specify the date.
Of the 253 people Hamas seized on Oct. 7, 133 hostages remain captive. Negotiators have spoken of around 40 going free in the first stage of a prospective deal.