Negotiations between Israel and Hamas on the Gaza war are expected to resume on Tuesday, Israeli sources reported on Tuesday.
Israel enters this round of indirect talks while refusing to end its war on the devastated territory, while Hamas considers this a basic condition for reaching a deal.
Israel seeks the release of the 121 hostages still in the Palestinian enclave, among them 37 believed dead.
Internal Israeli disputes and Israel's ongoing massacres in Gaza - including in Rafah, where a strike on a displacement camp killed at least 45 people - further complicate the negotiations.
Israeli newspaper Yedioth Ahronoth cited an unnamed official as saying the military operation in Rafah raises doubts about the possibility of the talks resuming.
Hamas had previously demanded that attacks in Rafah be halted in return for restarting the negotiations. It has also said that Israel must stop its war on Gaza.
However, Israeli Prime Minister Benjamin Netanyahu has categorically rejected this request, making chances of reaching an agreement highly unlikely.
The Israeli official said there are talks with mediators Egypt and Qatar, who will convey an Israeli proposal to Hamas.
The official said that if halting the Rafah operation is a condition for continuing the negotiations, "this could derail everything, because for Hamas, as long as we do not withdraw from Rafah, the negotiations will not resume".
broadcaster reported on Monday that Israel had conveyed its proposal to the mediators as part of the efforts to resume the Gaza negotiations, saying this was expected to be passed on to Hamas.
Israel's Channel 12 broadcaster cited an unnamed source as calling the Israeli proposal "bold" and saying that the Israeli negotiating team's mandate had recently been expanded, but the source said the issue of halting the war remains open.
Most of the Israeli war cabinet and the heads of the security establishment support an end to the military operation in Rafah and a deal with Hamas, but Netanyahu opposes this, Channel 12 reported.
Israeli broadcaster Kan 11 reported that there are Israeli concerns that the attack on Rafah could create obstacles to renewing the Gaza negotiations.
"The fears we warned about regarding a military operation in Rafah are being realised, and are putting everything at risk," Kan 11 quoted an unnamed foreign diplomat as saying.
Another unnamed official said: "As long as Israel does not stop the military operation in Rafah, no agreement will be reached."
Further complicating the issue of a deal in Gaza are internal Israeli disputes and fallouts between ministers within the war cabinet, with tensions between Netanyahu and Israeli Defence Minister Yoav Gallant and war cabinet member Benny Gantz surfacing in recent weeks.
Israel's war on Gaza has so far killed at least 36,096 people, according to the territory's health ministry.