Israeli Prime Minister Benjamin Netanyahu said on Sunday he had rejected conditions demanded by Hamas militants for the release of hostages, hours after the group released a report justifying its October 7 attack on Israel.

“In exchange for the release of our hostages, Hamas demands an end to the war, the withdrawal of our forces from Gaza, the release of all murderers…. If we accept this, our soldiers have fallen in vain. If we accept this, we won’t be able to guarantee the safety of our citizens,” Netanyahu said.

The Israeli army bombarded Khan Yunis, the new epicentre of the war in Gaza, on Monday as the families of hostages held by Hamas urged Prime Minister Benjamin Netanyahu to reach a deal to secure their release.

Witnesses reported deadly strikes overnight in Khan Yunis, the largest city in southern Gaza, and fierce fighting between Israeli soldiers and Hamas militants.

Netanyahu has vowed “complete victory” over Hamas after attacks by the Islamist movement’s fighters on October 7 that resulted in the deaths of about 1,140 people, mostly civilians, according to an AFP tally based on official Israeli figures.

Hamas militants also seized about 250 hostages and Israel says around 132 remain in besieged Gaza.

The war has spurred fears of a wider escalation, and sirens were heard again overnight in northern Israel near the border with Lebanon, according to the Israeli military.

There have been almost daily exchanges of fire between Israeli forces and the Iran-backed Hezbollah movement in Lebanon, and several areas of southern Lebanon were hit overnight.

One such Israeli strike killed a Lebanese Hezbollah fighter, according to a source in the Hamas-aligned group.

Violence has also surged in the Israeli-occupied West Bank.

Huthi rebels in Yemen have also attacked what they deem to be Israeli-linked shipping in the vital Red Sea shipping lanes, prompting retaliatory US and UK strikes, while attacks in Syria and Iraq have mostly been claimed by Iran-linked militants opposing US support for Israel.