Hamas, the group which controls the Gaza Strip, has ruled out any more hostage releases until Israel agrees to a "full cessation of aggression".
Israel says it has killed more than 2,000 Hamas fighters in Gaza since a truce earlier this month when more than 100 hostages were freed.
Around 120 people abducted from Israel on 7 October are believed to be still in captivity in Gaza.
Efforts continue at the United Nations to pass a resolution on the war.
The US has said it still has serious concerns over the draft UN Security Council resolution, with voting now postponed to Friday.
Fighting continues in Gaza, with Israel bombarding the north and south of the territory and Hamas firing rockets at Tel Aviv.
Among the Palestinians reported killed were the director of the police station in the southern city of Khan Younis and a daughter of the head of the Gaza health ministry.
The week-long truce this month brought an increased flow of aid into Gaza, where the UN has warned that the population is at risk of famine if the war between Israel and Hamas continues.
Negotiations on a new truce have been taking place in Cairo, Egypt, though initial talks on Wednesday bore no agreement.
In a statement, Hamas said: "There is a Palestinian national decision that there should be no talk about prisoners or exchange deals except after a full cessation of aggression."
It is unclear to which other Palestinian factions the statement was referring. Islamic Jihad, a smaller group in the Gaza Strip, is among those known to also be holding Israeli hostages.
The Hamas statement puts the Israeli government in a very difficult position.
It has said it thinks the best way to get the release of hostages is military pressure on Hamas and by staging rescue operations.
But so far that approach has not really worked. Only one hostage - Ori Megidish - has actually been rescued.
The government is also under huge pressure from the relatives of the hostages still being held, with some telling it the strategy of force is not working.
Hamas is putting pressure on Israel to stop the war altogether but without any guarantee that the group is going to stop its armed actions.
So the Israeli government is extremely reluctant to stop fighting until it feels it has completely degraded Hamas capability and it has not done that yet.
This will be a huge disappointment for the people of Gaza, who are desperate for this war to stop.
Early on Friday, the territory's Hamas-run health ministry put the overall death toll there since 7 October at 20,057, including at least 8,000 children and 6,200 women.
When Hamas and their allies broke through the heavily guarded perimeter with Israel on 7 October they killed 1,200 people.
Source: BBC