Israeli Prime Minister Benjamin Netanyahu on Wednesday dismissed Hamas's demand for a ceasefire and ordered troops to move on the city of Rafah in Gaza's far south, where more than one million Palestinians have sought refuge.

As the war entered a fifth month, Netanyahu told a televised briefing that he had ordered troops to "prepare to operate" in Rafah and that a "total victory" by Israel over Hamas was just months away.

But he warned that accepting the Palestinian militant group's "bizarre demands" for a ceasefire would not lead to the return of hostages.

"It will only invite another massacre," Netanyahu said.

The comments appeared to dampen US Secretary of State Antony Blinken's hopes for a ceasefire and hostage release deal, even as he cautioned that more negotiations were needed.

"There's a lot of work to be done, but we are very much focused on doing that work and hopefully being able to resume the release of hostages that was interrupted" after a week-long truce in November, Blinken said after talks with Netanyahu and other members of his war cabinet in Jerusalem.

An Egyptian official told AFP that "a new round of negotiations" would start on Thursday in Cairo aimed at achieving "calm in the Gaza Strip".

A Hamas source with knowledge of the matter said the Palestinian militant group had agreed to the talks, with the goal of "a ceasefire, an end to the war and a prisoner exchange deal".

Last week, a Hamas source said the proposed new truce calls for a six-week pause to fighting and a hostage-prisoner exchange, as well as more aid for Gaza, but negotiations have continued since.

Blinken, on his fifth Middle East tour since the October 7 attack, also made a new plea for more aid into Gaza, whose 2.4 million people have endured a crippling siege and severe shortages of clean water, food, fuel and medical supplies.

"We all have an obligation to do everything possible to get the necessary assistance to those who so desperately need it," Blinken said, "and the steps that are being taken -- additional steps that need to be taken -- are the focus of my own meetings here."

Blinken later travelled to the occupied West Bank where he met Palestinian president Mahmud Abbas.

For now, the war raged on unabated in Hamas-ruled Gaza, where the health ministry said at least 123 people were killed in the past 24 hours and AFP journalists reported more heavy bombing of southern cities.

UN Secretary-General Antonio Guterres said he was "alarmed" by reports that the Israeli military would push on into Rafah, where hundreds of thousands of civilians have fled to escape daily bombardments.

The city's population has now swollen to more than one million -- half of the population of the Palestinian territory. (AFP)