Israeli Prime Minister Benjamin Netanyahu is considering a plan to annex territories in Gaza, two sources familiar with the matter told ABC News.

"Prime Minister Netanyahu is considering a plan to annex territories in Gaza if Hamas doesn't agree to a ceasefire plan. This is one of several options," a source said.

The news comes less than a week after Steve Witkoff, President Donald Trump's special envoy to the Middle East, said the U.S, was cutting ceasefire talks short and bringing its negotiation team home from Doha, Qatar.

In a post on X on July 24, Witkoff said Hamas was not "acting in good faith."

"While the mediators have made a great effort, Hamas does not appear to be coordinated or acting in good faith," Witkoff wrote, in part. "We will now consider alternative options to bring the hostages home and try to create a more stable environment for the people of Gaza."

Netanyahu echoed Witkoff's statement and blamed Hamas for the breakdown in negotiations.

"Special Envoy to the Middle East Steve Witkoff got it right. Hamas is the obstacle to a hostage release deal," Netanyahu said in a statement the day after Witkoff's comments. "Together with our U.S. allies, we are now considering alternative options to bring our hostages home, end Hamas's terror rule, and secure lasting peace for Israel and our region.

In its own statement on Sunday, Hamas accused Witkoff and the Israelis of negotiating in bad faith and claimed there is no point in continuing negotiations in the current format.

"In the last round of negotiations, we achieved clear progress and largely agreed with what the mediators presented to us, especially regarding the issue of withdrawal, prisoners, and the entry of aid," Hamas said, in part. 'They conveyed to us positive responses from the Zionist occupation, but we were surprised to find that the occupation was withdrawing from the negotiations, and that the US President's envoy to the Middle East, Witkoff, was in cahoots with it."

"We clearly state: There is no point in continuing negotiations under the siege, extermination, and starvation of our children, women, and people in the Gaza Strip," the statement continued.

This is a developing story. Please check back for updates.