Netanyahu renewed a pledge to destroy the Palestinian Islamist movement, saying there was no alternative for Israel but bringing about the collapse of Hamas.
"Surrendering to Hamas's delusional demands that we heard now not only won't lead to freeing the captives, it will just invite another massacre," Mr Netanyahu said in a nationally televised evening news conference on Wednesday.
Israel's Prime Minister Benjamin Netanyahu met with US Secretary of State Antony Blinken. (EPA PHOTO)
"We are on the way to an absolute victory," he said, adding that the operation would last months, not years.
"There is no other solution."
Hamas had proposed a Gaza ceasefire of four-and-a-half months, during which all hostages would go free, Israel would withdraw its troops from the Gaza Strip and an agreement would be reached on an end to the war.
The Hamas offer, the contents of which were first reported by Reuters, is a response to an earlier proposal drawn up by US and Israeli spy chiefs and delivered to Hamas last week by Qatari and Egyptian mediators.
US Secretary of State Antony Blinken discussed the offer with Netanyahu after arriving in Israel following talks with the leaders of Qatar and Egypt, the countries that have acted as mediators. Blinken later met Palestinian President Mahmoud Abbas in Ramallah.
Israel began its military offensive after militants from Hamas-ruled Gaza killed 1200 people and took 253 hostages in southern Israel on October 7.
US Secretary of State Antony Blinken also met with Palestinian President Mahmoud Abbas. (EPA PHOTO)
Gaza's health ministry says at least 27,585 Palestinians have been confirmed killed, with thousands more feared buried under rubble. There has been only one truce so far, lasting just a week at the end of November.
Israel has previously said it would not pull its troops out of Gaza or end the war until Hamas was wiped out.
But sources described Hamas as taking a new approach to its longstanding demand to end the war, now proposing this as an issue to be resolved in future talks rather than a condition for the truce.
A source close to the negotiations said the Hamas counterproposal did not require a guarantee of a permanent ceasefire at the outset, but that an end to the war would have to be agreed before final hostages were freed.
with AP