(Bloomberg) -- Israel said Hamas had rejected the latest cease-fire proposal from mediators, as tensions escalate following Iran’s mostly foiled assault against the Jewish state overnight.

Hamas, a militant group supported by Iran, turned down the outline presented by mediators, according to Mossad, the Israeli external-intelligence agency.

While Mossad didn’t directly say the Iran drone and missile strikes on Israel were to blame, it said Hamas’s leader in Gaza, Yahya Sinwar, “is continuing to exploit the tension with Iran” and “does not want a humanitarian deal and the return of the hostages.”

The statement from Mossad, which is leading Israel’s negotiations with Hamas, was published by the office of Prime Minister Benjamin Netanyahu. Israel had shown plenty of flexibility in the talks, it said.

They are being brokered by the US, Qatar and Egypt.

The pessimism contrasts with Israeli officials saying last week there had been progress in negotiations for a truce in Gaza that would include the release of hostages held by Hamas and Palestinian prisoners.

Foreign Minister Israel Katz said then that the talks had reached a critical point and he “was more optimistic than I was.”

The Israel-Hamas war erupted with fighters from the group attacked southern Israel on Oct. 7, killing 1,200 people and abducting around 250. Israel’s retaliatory attack on Gaza has killed more than 33,000 people, according to the Hamas-run health ministry there.

Around half the hostages were released during a week-long pause in fighting that ended on Dec. 1. It’s unclear how many of the remaining 130 or so captives are still alive.

Hamas is designated a terrorist organization by the US, European Union and others.

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