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".

Hamas said on Friday it agreed to release an American-Israeli dual national, believed to be the last living American hostage held in Gaza, after receiving a proposal from mediators to continue negotiations on the second phase of a ceasefire deal.