Israel has recalled its negotiators from Doha after deeming mediated talks on a Gaza truce "at a dead end" due to demands by Hamas, a senior Israeli official said on Tuesday.
The official, who is close to the Mossad spymaster heading up the talks, accused Hamas' Gaza leader Yahya Sinwar of sabotaging the diplomacy "as part of a wider effort to inflame this war over Ramadan".
The warring sides had stepped up negotiations, mediated by Qatar and Egypt, on a six-week suspension of Israel's offensive in return for the proposed release of 40 of the 130 hostages still held by the Palestinian militant group in Gaza.
Hamas has sought to parlay any deal into an end to the fighting and withdrawal of Israeli forces. Israel has ruled this out, saying it would eventually resume efforts to dismantle the governance and military capabilities of Hamas.
Hamas also wants hundreds of thousands of Palestinians who fled Gaza City and surrounding areas southward during the first stage of the almost six-month-old war to be allowed back north.
The Israeli official said that Israel had agreed to double the number of Palestinians it would release in exchange for the hostages to 700-800 prisoners and allow some displaced Palestinians to return to northern Gaza.
Israeli Prime Minister Benjamin Netanyahu's office said on Tuesday that Hamas had made "delusional" demands, which it said showed the Palestinians were not interested in a deal.
In Tel Aviv, a crowd of around 300 family members of hostages and their supporters gathered outside the Israeli defence headquarters demanding a deal be done to release the captives. Some locked themselves inside cages in protest, holding placards with photos of their loved ones. "No price is too high," one of the signs said.
Hamas has accused Israel of stalling at the talks while it carries out its military offensive.
The discussions in Doha are continuing as Palestinians in Gaza face severe shortages of food, medicine and hospital care, and concerns grow that famine will take hold.
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