Iranian-backed terror groups Hamas and the Palestinian Islamic Jihad reportedly rejected Monday an Egyptian-brokered peace proposal that would call for the groups to relinquish power in the Gaza Strip as a condition for a permanent cease-fire in the war.

Two Egyptian security sources said the plan would involve Hamas ending its 17-year reign over Gaza with the formation of a Palestinian parliament followed by free elections, the New York Post reported Monday.

Egypt's plan, backed by Qatar, would involve a pause to the war of two weeks in exchange for the release of about 40 hostages. More than 100 Israeli hostages are being held by the groups since the Oct. 7 terrorist attack orchestrated by Hamas that led to the massacre of more than 1,200 Israeli civilians.

It is believed this gesture would lead to a broader agreement involving a permanent cease-fire along with the replacement of the Hamas leadership in Gaza with a parliamentary government. The phase of the agreement would see all the remaining hostages freed in exchange for an end to the war and the Israeli military's exit from Gaza.

But the terrorist groups said the only thing they will discuss is a prisoner swap that would see the release of the Israeli hostages in exchange for hundreds of Palestinian prisoners held in Israeli jails.

A Hamas official who was in Egypt during the negotiations said even a prisoner swap would only take place once Israel has withdrawn its forces from Gaza, the Post reported. Israel has said it will end its military campaign only when Hamas is destroyed, and all of its hostages are returned.

"There can be no negotiations without a complete stop to the aggression," Izzat al-Rishq, a member of Hamas' political wing, told Reuters. "The Hamas leadership is aiming with all its might for a complete, not temporary, end to the aggression and massacres of our people."

A senior PIJ official familiar with the Cairo talks echoed al-Rishq's statement, Reuters reported.

In an op-ed for The Wall Street Journal published Monday, Israel Prime Minister Benjamin Netanyahu outlined three prerequisites for a peace deal: Hamas must be destroyed, Gaza must be demilitarized, and Palestinian society must be deradicalized.

"Successful deradicalization took place in Germany and Japan after the Allied victory in World War II," Netanyahu wrote. "Today, both nations are great allies of the U.S. and promote peace, stability and prosperity in Europe and Asia. More recently, since the 9/11 attacks, visionary Arab leaders in the Gulf have led efforts to deradicalize their societies and transform their countries.

"Israel has since forged the historic Abraham Accords and today enjoys peace agreements with six Arab states. Such a cultural transformation will be possible in Gaza only among Palestinians who don't seek the destruction of Israel.

"Once Hamas is destroyed, Gaza is demilitarized and Palestinian society begins a deradicalization process, Gaza can be rebuilt and the prospects of a broader peace in the Middle East will become a reality."

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