Israel is seeking changes to a plan for a Gaza truce and the release of hostages by Hamas, complicating a final deal to halt nine months of combat that have devastated the enclave.
Israel says displaced Palestinians should be screened as they return to the enclave's north when the ceasefire begins, retreating from an agreement to allow civilians who fled south to freely return home, four sources told Reuters.
Israeli negotiators "want a vetting mechanism for civilian populations returning to the north of Gaza, where they fear these populations could support” Hamas fighters who remain entrenched there, said the Western official.
The Palestinian militant group rejected the new Israeli demand, according to the Palestinian and Egyptian sources.
Another sticking point, the Egyptian sources said, was over Israel's demand to retain control of Gaza's border with Egypt, which Cairo dismissed as outside a framework for a final deal accepted by the foes.
Israeli Prime Minister Benjamin Netanyahu's office, the White House and Egypt's foreign ministry did not immediately respond to requests for comment on Israel's demands.
“Netanyahu is still stalling. There is no change in his stance so far," said Hamas senior official Sami Abu Zuhri, who did not comment directly on Israel's demands.
Word of the new sticking points came as US President Joe Biden pressed for a ceasefire in talks in Washington on Thursday with Israeli Prime Minister Benjamin Netanyahu on reaching a final deal.
In a speech to the US Congress on Wednesday, Netanyahu said that Israel was engaged "in intense efforts" to secure the release of hostages held in Gaza.
The sources who spoke to Reuters requested anonymity to discuss Israeli demands because of the delicacy of the on-off talks to finalise a truce and the release of hostages seized in the Hamas-led October 7 assault on Israel that triggered the Gaza war.
The attackers killed 1200 people and took more than 250 captives, according to Israeli tallies. Some 120 hostages are still being held, though Israel believes a third of them are dead.
Gaza health authorities say more than 39,000 Palestinians have been killed and most of Gaza's 2.3 million people displaced by fighting that has destroyed much of the enclave and created a humanitarian disaster.
The United States, Qatar and Egypt have been mediating indirect talks between Israel and Hamas centred on a framework based on an Israeli offer and promoted by Biden, who has pressed the sides to resolve their remaining differences.
The framework calls for three phases, with the first seeing a six-week ceasefire and the release of women, elderly and wounded hostages in exchange for hundreds of Palestinian prisoners held by Israel.
Talks on the second phase - which Biden calls "a permanent end to hostilities" - would continue in the first phase. Major reconstruction would begin in the third phase.
US officials have said for weeks that a deal was close but that hurdles remained.
Israeli officials raised their demand for a mechanism to vet civilians returning to Gaza's north at the last negotiating session in Cairo earlier this month, said the Western and Egyptian sources. This "wasn't expected," the Western official said.
Israel is concerned not only about Hamas fighters slipping back north, but “operatives” among civilians who provide covert support to the group that governs Gaza, the official said.
The Israelis, the official and the three other sources said, also baulked at withdrawing their forces from a 14km strip of land along the border with Egypt referred to by Israel as the Philadelphi corridor.
The Israel Defence Forces seized the strip in May, saying that the strategic swath hosts smuggling tunnels through which Hamas has received weapons and other supplies. Egypt says it destroyed tunnel networks leading to Gaza years ago and created a buffer zone and border fortifications that prevent smuggling.
The past several days have seen efforts to “work around” that issue, either through an Israeli withdrawal “or there could be some understanding about how that is managed,” said the Western official, who did not elaborate.
