Despite optimistic talk from Cairo and Jerusalem, talks of hostages and ceasefire appear to be deadlocked, with both Hamas and Israel saying large gaps remain.

Meanwhile, Netanyahu’s government appears in dangers, as right-wing coalition partners threaten Bibi that the failure to keep his solemn promise to enter Rafah will spell the end of the government’s mandate.

But a substantial ground movement in Rafah would almost certainly cause a crisis in relations with the Americans.

So PM Benjamin Netanyahu finds himself caught between in a fateful dilemma of historic proportions. He has said that failing to enter Rafah would mean that Israel has lost its war.

A Hamas official said on Monday that no progress was made at a new round of Gaza ceasefire talks in Cairo, attended by delegations from Israel, Qatar, and the US, headed bty CIA chief William Burns.

Upping the ante, Iran reportedly informed the US that success in reaching a ceasefire would forestall its threat of a direct attack on Israel.

“There is no change in the position of the occupation, and therefore, there is nothing new in the Cairo talks,” the Hamas official, who asked not to be named, told Reuters. “There is no progress yet.”

Earlier Monday, Egypt’s state-affiliated Al-Qahera News TV channel quoted a senior Egyptian source as saying that significant progress had been made and that a deal was within reach.

In Jerusalem at the weekend, Israeli Foreign Minister Israel Katz described the Cairo talks as the closest the sides have come to a deal since a November truce under which Hamas freed dozens of hostages.

“We have reached a critical point in the negotiations. If it works out, then a large number of hostages will come home,” he told Israel’s Army Radio.

The concessions related to the release of Israeli hostages held by Hamas come from the terrorist group’s demand for the return of displaced residents to northern Gaza, they added, without giving further details.

Al-Qahera reported that consultations were expected to continue within the next 48 hours.

These steps take precedence over Israel’s prime demand for a release of hostages in exchange for Palestinians held in Israeli prisons, said the official, speaking on condition of anonymity.

“Regarding the exchange of prisoners, Hamas was and is willing to be more flexible, but there is no flexibility over our…main demands,” he told Reuters.

Despite withdrawing all but a brigade of its troops overnight Saturday, Israel has ruled out winding up the war shortly or withdrawing from Gaza, saying its forces will not relent until Hamas no longer controls Gaza or threatens Israel militarily.

Netanyahu said Israel would not give in to “extreme” Hamas demands. But Israeli officials signaled a willingness to allow some Palestinians displaced from northern Gaza to return there.

Defense Minister Yoav Gallant said the troops would be preparing for future military operations, including “their coming mission in the Rafah area.”

As Israeli forces retreated from the heart of residential areas of the southern city of Khan Yunis, rocket sirens blared throughout the border communities near the Gaza Strip. The Israeli air force destroyed three Gamas rocket launchers discovered in the town, adjacent to refugee encampments. 

Residents of Rafah, claimed that Israel carried out at least five airstrikes on parts of the city, causing a number of injuries.