Hamas says it will only release an American-Israeli and the bodies of four other hostages if Israel implements the existing ceasefire agreement in the Gaza Strip, calling it an "exceptional deal" aimed at getting the truce back on track.

Hamas said on Friday it had agreed to free an American-Israeli dual national if Israel begins a phase of ceasefire talks towards a permanent end to the war, but Israel dismissed the offer as "psychological warfare".

Israel launched a large-scale military operation centered on Jenin shortly after reaching a fragile ceasefire with Hamas in the Gaza Strip in January. Troops have destroyed homes and infrastructure, and tens of thousands of Palestinians have fled their homes across the northern West Bank.