Prime Minister Binyamin Netanyahu opened Sunday morning's cabinet meeting by emphasizing that Israel would not accept any ceasefire deal which compromised on its security.
Netanyahu said Hamas had lost the recent round of fighting in Gaza, during which it suffered "harsh blows", and vowed that Israel would not squander its military victory by capitulating during negotiations in Cairo.
"Only if there is a clear answer to Israel's security needs, only then will we agree to reach an understanding," Netanyahu insisted.
"If Hamas thinks it will make up for its military losses with a political achievement, it is wrong," he said. "If Hamas thinks that by continuing the steady trickle of rocket fire it will force us to make concessions, it is wrong. As long as there is no quiet, Hamas will continue to suffer heavy blows."
"Hamas knows we have a lot of power but maybe it thinks we don't have enough determination and patience, and even there it is wrong, it is making a big mistake," he warned.
In Gaza, Hamas spokesman Sami Abu Zuhri reiterated the group's insistence that it would not back down from its demands, and insisted that the outcome of the talks was in Israel's hands.
"We are committed to achieving the Palestinian demands and there is no way back from this. All these demands are basic human rights that do not need this battle or these negotiations," Abu Zuhri told AFP. "The ball is in the Israeli occupation's court."
Israeli Ministers have railed against Hamas's demands it be allowed to open air and seaports, and that Israel lift its restrictions on travel and imports into Gaza, which are aimed at stopping the flow of arms into the Islamist-ruled enclave.
"It will be a 'Duty Free' for rockets," remarked Security Minister Yitzhak Aharonovich.