Hamas’s leader has said he will only agree to a new truce deal if it guarantees the release of all Palestinian prisoners currently being held in Israeli jails, according to reports.

Al Arabi Al Jadidi, a pro-Qatari newspaper, on Thursday quoted an unnamed Egyptian official saying the “leadership of Hamas” had rejected Israel’s offer of a temporary truce in exchange for the release of several dozen Israeli hostages.

Hamas, led by Yahya Sinwar, insisted on a lasting ceasefire and all Palestinian prisoners released including high-profile figures, the newspaper reported.

Sinwar also reportedly demanded that Israel halt its combat operations in Gaza before the deal goes into effect.

The report came days after talks between the Mossad chief, the CIA director and Qatar’s prime minister aimed at setting up a second hostage deal failed to produce tangible results.

On Thursday, Israel’s Yedioth Ahronoth newspaper reported that Hamas wants at least three high-profile figures including Marwan Barghouti, a Palestinian leader jailed during the Second Intifada, his relative and Hamas member Abdullah Barghouti and Ahmad Saadat, a senior figure in the Popular Front for the Liberation of Palestine, to be freed in a future deal.

Marwan Barghouti and Mr Saadat are political heavyweights with ambitions to lead the Palestinian Authority.

A recent opinion poll in the West Bank showed that Marwan Barghouti was a more popular choice as the leader of Palestine than current President Mahmoud Abbas.

Sinwar’s tunnels ‘uncovered’

Earlier on Thursday, the Israel Defense Forces (IDF) said it had uncovered a network of tunnels running underneath Gaza City from a property allegedly owned by Sinwar.

Footage released by the Israeli army showed a spiral staircase in a tunnel shaft leading down to an underground corridor.

The tunnels are kitted out with surveillance cameras, heavy blast doors and electricity, the IDF videos showed.

Lieutenant Colonel Peter Lerner, an IDF spokesman, told reporters that soldiers found the tunnels after securing a central area of the city in recent days.

The IDF last night designated about 20 per cent of central and south Khan Younis for immediate civilian evacuation.

The area was home to more than 100,000 people before the war. Its population is now believed to have doubled with large numbers of internally displaced Palestinians arriving from the north.

Meanwhile, on Thursday the World Health Organisation (WHO) said northern Gaza has been left without a functional hospital due to a lack of fuel, staff and supplies.

Only nine out of 36 health facilities were partially functional in the whole of Gaza, according to the WHO. All these facilities are concentrated in the south of the enclave.

“There are actually no functional hospitals left in the north,” said Richard Peeperkorn, the WHO’s representative in Gaza.

“Al-Ahli [Hospital] was the last one but it is now minimally functional: still treating patients but not admitting new ones.”

Describing it as a “shell of a hospital”, Mr Peeperkorn said Al-Ahli resembled a hospice providing very limited care. About 10 staff, all junior doctors and nurses, continue to provide basic first aid, pain management and wound care with scant resources, he said.