US says Gaza hostage deal 'possible,' with 'tremendous' benefits

The United States said Monday it still sought a deal to free Gaza hostages after a deadly Israeli strike in crowded Rafah freed two captives, as it renewed warnings over a wider Israeli operation.

Sources familiar with developments said that CIA Director William Burns is expected Tuesday in Cairo for a new round of talks on a Qatari-mediated deal after Israel rejected the initial response last week from Hamas.

"There were a number of really untenable items in the proposal that came back from Hamas, but we do believe that a deal is possible and we're going to continue to pursue it," State Department spokesman Matthew Miller told reporters.

"We think the benefits of a pause and a deal for hostages are tremendous, not just obviously for the hostages who would be released but also for the humanitarian effort in Gaza and for our ability to begin to pursue a real and lasting, sustainable resolution of this conflict," he said.

The proposal -- first thrashed out in talks in Paris that brought together Burns with top Israeli, Qatari and Egyptian officials -- would temporarily pause fighting in return for Hamas freeing hostages.

Israeli Prime Minister Benjamin Netanyahu, after talks last week with Secretary of State Antony Blinken, rejected the Hamas counterproposal and vowed to deal a "fatal blow" to the militants, who carried out the massive October 7 attack inside Israel.

Israel on Monday welcomed back two hostages after overnight bombing in Rafah that killed around 100 people, including hostages.

The strikes came hours after Netanyahu spoke by telephone with President Joe Biden who said the United States opposed an assault on Rafah -- where more than one million Palestinians have sheltered since the start of the four-month war -- without a plan for civilians' safety.

"It's not our assessment that this airstrike is the launch of a full-scale offensive happening in Rafah," Miller said.

"We will make clear -- as we did last weekend, as the president did in his conversation over the weekend -- that without such a plan that is credible, and that they can execute, we do not support a full-scale military operation there going ahead," he said.

The United States, however, has said that it supports "legitimate military campaigns" against the Hamas leadership and battalions and said that the militants bear responsibility for the conflict.

"There can be no enduring end to this crisis until Hamas releases the men and women that they are holding hostage -- all of them," National Security Council spokesman John Kirby said at the White House.

US officials declined to discuss what repercussions Israel may face if it went ahead with a Rafah campaign without protecting civilians.

"I am not ruling anything out. I'm saying we have not made the assessment," Miller said.

Asked if the United States would consider cutting aid to Israel, Miller said: "You've got to look... at how such a step would be received by Israel's opponents, both inside Gaza and outside of the state of Israel."