Hamas officials issued a statement Thursday morning in Gaza City to announce that Israel has rejected their proposed ceasefire agreement, which included the release of all hostages and detainees, warning they are fully prepared for a lengthy and costly battle should diplomacy fail to end their conflict.

Abu Obaida, spokesperson for Hamas, issued the following statement in which they claimed they offered an extensive deal including a phased ceasefire, humanitarian access to Gaza, and exchanging Israeli captives held in Israeli jails with Palestinian prisoners held there – according to them, this deal had been brokered through regional mediators such as Qatar and Egypt.

Abu Obaida stated in a televised address, that Israel once again rejected an equitable and balanced proposal which would have released all captives while providing relief to civilians on both sides. If Israel wants war, we are prepared for whatever duration that lasts.”

Hamas did not give any details regarding its proposed prisoner swap plan; however, according to sources familiar with negotiations, Hamas is willing to release all Israeli civilians and military personnel held in Gaza in exchange for freeing several thousand Palestinian detainees – both high-profile political prisoners as well as minors held captive there.

Israeli officials have not provided an official response to this claim; however, sources within their government informed Haaretz that such a proposal was considered unrealistic and unacceptable, particularly as it included prisoners convicted of terrorist offenses.

Benjamin Netanyahu stated at a Security Cabinet meeting earlier this week that Israel will not enter any ceasefire agreement which leaves Hamas’ military capabilities intact.

“No agreement will allow Hamas to regroup, rearm or maintain any hold over power in Gaza,” Netanyahu stated. “Our operations will continue until our objectives have been fully achieved, such as dismantling terrorist infrastructure and returning all our citizens safely home.”

Now into its third month, this war has caused untold destruction in Gaza. Palestinian health authorities report over 17,000 casualties as well as severe shortages of food, fuel and medical supplies. Israeli officials estimate over 1,400 fatalities since October began; including military personnel as well as civilians killed by Hamas rocket attacks or cross-border raids.

International pressure remains intense on both sides to negotiate an immediate ceasefire and return to negotiations, with the UN, European Union, and several Arab nations all calling for immediate ceasefire and negotiations to resume.

But Thursday’s developments suggest that peace remains elusive.

“We had hoped the latest round of talks would produce a breakthrough,” stated an Egyptian diplomat involved in mediation efforts. Instead, both sides are hardening their positions further.

Hamas concluded its statement by warning Israel that continuing its military campaign will result in rising costs on all fronts.

Abu Obaida stated, “We possess both the capability, will and faith necessary to continue resistance efforts,” adding: “Time is running out for them.”