The United States has put forward a new proposal that would secure the release of a handful of living hostages held by Hamas in exchange for a month-long extension of the Israel-Hamas ceasefire, a source familiar with the negotiations said.

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".

White House envoy Steve Witkoff presented an updated U.S. proposal for extending the Gaza ceasefire deal by several weeks in return for additional hostage releases by Hamas and the resumption of humanitarian aid to Gaza, four sources with direct knowledge tell Axios.