Israeli Prime Minister Benjamin Netanyahu’s office on Friday dismissed as “absolute fake news” a report it is negotiating with Egypt over withdrawing its troops from the eight-mile corridor dividing the two countries as part of ongoing talks over a Gaza cease-fire and hostage-release deal.

“The Prime Minister insists that Israel remain on the Philadelphi Corridor,” as the area is known, a statement from Netanyahu’s office said. It came in response to a Reuters report that Israeli withdrawal from the Gaza side of the border was the focus of negotiations throughout the day in Cairo.

Insistence that Israeli troops will remain in the corridor is one of several snags that have dampened last week’s optimism that an agreement to stop the fighting could be imminent. Egyptian state television, citing an unidentified official, said that “disputed points go beyond what was previously agreed upon with the mediators,” which include the United States, Qatar and Egypt.

President Biden, at his Thursday news conference marking the conclusion of this week’s NATO summit, voiced confidence that a deal was within reach, saying the “framework” of the cease-fire plan he laid out six weeks ago “is now agreed on by both Israel and Hamas.” While “there are still gaps to close,” Biden said, “we’re making progress, the trend is positive.”

Just hours before Biden spoke, White House national security adviser Jake Sullivan also cited “positive” signs, but said that “‘optimistic’ is always a hard word to use in a sentence around this tragic conflict.”

“I think there’s still miles to go before we close, if we are able to close,” Sullivan said.

U.S. and Arab officials said that while the two sides were closer than they have been, Israel had interjected new conditions to the proposal’s broad outline and both sides had balked on some of the details during talks that took place this week in Cairo and Doha. The officials spoke on the condition of anonymity about the sensitive negotiations.

Meanwhile, Israeli media, reflecting ongoing tension between Netanyahu and the leadership of the Israel Defense Forces, quoted anonymous military officials accusing the prime minister of intentionally seeking to stall the process. The officials spoke on the condition of anonymity about the sensitive negotiations.

“The ball is in Netanyahu’s court,” said a former senior Egyptian official with knowledge of the negotiations. “Netanyahu does not want peace. That is all. He will find excuses … to prolong this war until 5 November,” the date of the U.S. presidential election. Polls show Biden trailing his opponent, former president Donald Trump, whose Republican Party has been less critical of Israel’s conduct in the war.

In a statement Thursday, Hamas accused Netanyahu of “procrastination to buy time with the aim of thwarting this round of negotiations.”

The families of dozens of hostages who remain in Hamas captivity have been at the forefront of escalating demonstrations in Israel demanding that Netanyahu complete the deal, with some accusing him of holding back to keep his government from falling in the face of pressure from extreme right-wing coalition partners who oppose an agreement. The ongoing war has also shifted attention away from corruption charges that also threaten his hold on power.

Netanyahu is scheduled to travel to Washington to address a joint session of Congress on July 24, and it is unclear whether Biden, whose relationship with the Israeli leader has become more strained as the war’s civilian toll has grown, will hold a formal meeting with him. “We believe that they will have some engagement,” White House spokeswomen Karine Jean-Pierre told reporters Friday. “I just don’t have anything to announce at this time.”

“He’s going to use his U.S. visit to salvage his political situation internally as much as he can,” an Arab official said. “He’s going to keep his coalition together until he finds some allies that could come along and compensate if he needs to.”

The three-phase plan announced by Biden on May 31 includes a six-week initial stage with a cease-fire and a surge in humanitarian aid. Israeli forces would withdraw from all populated areas, and female, elderly and wounded hostages held in Gaza would be exchanged for hundreds of Palestinian prisoners held in Israel. Palestinians would also have free passage to return to their homes in areas that have long been blocked by Israeli troops.

Assuming no violations occurred, the six-week cease-fire would continue indefinitely as the parties negotiated a second phase that calls for a “permanent” truce, which would include a complete Israeli withdrawal and the release of remaining hostages. A third phase would begin internationally financed Gaza reconstruction, new Palestinian governance for the enclave and the eventual establishment of an independent Palestinian state.

While the administration has long accused Hamas of holding up a deal that it said Israel had already agreed to, the militant leadership late last week dropped a demand that an end state of permanent cease-fire and full Israeli withdrawal be guaranteed before it would enter the first phase. The Biden administration characterized the move as a “significant adjustment” in Hamas’s negotiating position and sent its chief negotiator, CIA Director William J. Burns, back to the region.

Burns has now returned to Washington. Brett McGurk, the National Security Council’s Mideast chief, continued talks in Cairo Friday.

Israel’s Philadelphi Corridor demand, among several Israeli red lines Netanyahu announced in a Thursday speech to newly graduating IDF officers, would appear to violate conditions outlined in the framework plan. While Egypt and Israel were said to be close to an agreement on adjustments to border security to prevent Hamas smuggling, including electronic and physical barriers, an Israeli military presence there would also violate preexisting border agreements.

Far from a permanent cease-fire, Netanyahu insisted Israel be able to “return to the fight” following the release of hostages “until all the objectives of the war are achieved.”

Negotiators were said to be trying to find a way around his insistence that Israel would “not allow the return of armed terrorists and the entry of war materiel to the northern Gaza Strip” in order to permit hundreds of thousands of Gazans who fled Israeli attacks in the north earlier this year to return home, as the proposed agreement stipulates.

“We may have moved from the performative phase of negotiations — each side trying to pin the collapse of the deal on the other — to something that is actually headed to an agreement,” said Aaron David Miller, a former U.S. adviser and negotiator in the Middle East. “The danger now is that each side, especially Netanyahu, will ask for too much and create a self-reinforcing race to the bottom and a cratering of the entire process.”

Meanwhile, the war that shifted in early May from northern Gaza to Rafah in the far south, where at least 1.5 million Palestinians had taken refuge, has now returned to northern areas that Israel had once declared clear of Hamas.

Two days after the Israeli military issued a sweeping directive for all Palestinians to leave Gaza City, suggesting intensified military operations to come in what was once the northern population hub, the families that remained there were sheltering in bomb- and bullet-slashed buildings, Louise Wateridge, a spokesperson for the United Nations agency for Palestinian refugees, said Friday.

After nine months of war, the city is one of the most deprived in Gaza — mostly cut off from international aid deliveries, and with entire streets flattened by Israeli airstrikes.

Wateridge said that families she met there were living in dire conditions. Several women she spoke with described traumatic births without health care; girls spoke of enduring their periods without access to clean water or any sanitary products.

As the United Nations convoy approached the city, its aid workers saw some Palestinian families leaving on foot, apparently in search of refuge further south. They held their hands in the air as they walked toward Israeli military checkpoints, she said. The air was baking, and there was little shade. “Every group we saw had young children. And the children were often carrying white flags on sticks, made out of whatever white fabric that they were able to find,” she said.

Louisa Loveluck in London, Heba Mahfouz in Cairo and Lior Soroka in Tel Aviv contributed to this report.