Israel's Mossad spy agency said on Sunday that Palestinian militant group Hamas had rejected the latest proposal by international mediators for a truce in the war in Gaza.

"The rejection of the proposal... proves that (Hamas chief in Gaza Yahya) Sinwar does not want a humanitarian deal and the return of the hostages, is continuing to exploit the tension with Iran" and is aiming for "a general escalation in the region", Mossad said in a statement released by the Israeli prime minister's office.