In a televised statement, a Hamas spokesman said Israel will not receive "their prisoners alive without an exchange and negotiation and meeting the demands of the resistance." Senior Hamas official Bassem Neim said in late November the movement was "ready to release all soldiers in exchange for all our prisoners".
WATCH: Israel bombs south Gaza after Hamas hostage threat iol.co.za - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from iol.co.za Daily Mail and Mail on Sunday newspapers.
Israel bombed southern Gaza's main city on Monday after Hamas warned no Israeli hostages would leave the territory alive unless its demands for prisoner releases were met.
At least 30,000 people have taken refuge in the hospital grounds between piles of rubble and waste after Israeli forces raided the medical facility last month.