(Bloomberg) -- Israeli Prime Minister Benjamin Netanyahu has opted not to send a delegation to Cairo for follow-up talks aimed at securing a cease-fire with Hamas, again dismissing the militant group’s demands as “delusional.”  

Israel is holding out for Hamas to change its position before taking any further role in negotiations, the prime minister’s office said Wednesday. The Iran-backed militant group has insisted on the total withdrawal of Israeli troops from Gaza in return for the release of hostages, something Netanyahu has categorically ruled out. 

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Hamas, which is deemed a terrorist organization by the US and the European Union, has also called for the release of all Palestinian prisoners held in Israel, including those convicted of murder and other violence.

Israel’s delegation, led by the head of intelligence agency Mossad, David Barnea, returned from talks in Egypt on Tuesday.

“Netanyahu insists that Israel will not give in to Hamas’s delusional demands,” his office said. “A change in Hamas’s positions will allow the negotiations to advance.”

The comments came around the same time as tensions between Israel and Hezbollah escalated when an Israeli town and army base came under stronger-than-normal rock attack from Lebanon. Israel retaliated with an extensive bombardment of Hezbollah positions and towns in southern Lebanon. Hezbollah is also backed by Iran and designated a terrorist organization by the US.

Israel’s position regarding the Cairo talks suggests a cease-fire, even a temporary one, remains a distant prospect. At the same time, international fears grow about the fate of more than 1 million Palestinian refugees taking shelter in the southern Gaza city of Rafah. Israel’s military is preparing an assault on the town close to Egypt’s border, where it says Hamas’s remaining fighters are based, and Netanyahu has pledged to allow civilians out beforehand. 

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Egyptian media reported that US Central Intelligence Agency Director William Burns met with Barnea as well as Qatar’s prime minister and the head of Egypt’s intelligence service to discuss a deal.

Netanyahu had initially refused to send an Israeli delegation to the talks at all, but eventually agreed to do so following pressure from US President Joe Biden, according to Ynet. More than 130 of the approximately 250 people taken by Hamas in its attack on Israel on Oct. 7 are still being held in Gaza.

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The hostage families forum said that the families “were stunned by the decision to thwart the Cairo negotiations,” according to a statement.

--With assistance from Galit Altstein and Dana Khraiche.

(Updates with context on rocket fire from Lebanon.)

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