TEL AVIV – Hamas confirmed Wednesday that the terror group received an offer for a prisoner exchange deal from Israel, but rejected it for not meeting its “minimum demands.”

Hamas and Israel, through the use of intermediaries, were in talks to secure the release of three Israelis who crossed into Gaza independently – Avraham Mengistu, Hisham al-Sayed, and Juma Ibrahim Abu Ghanima.

Hamas is also holding the bodies of IDF soldiers Oron Shaul and Hadar Goldin, who the army says were killed in action in the 2014 Gaza war. Hamas claims that Shaul is alive and in captivity.

A senior Hamas source told the Times of Israel that it demanded the Jewish state release 60 members of the terror group who were arrested after being freed in an earlier exchange.

“Only after that can we move forward in the negotiations between the sides,” the source said.

An Israeli source said talks were ongoing but “we are not there yet.”

A spokesperson for Hamas’s military wing the Izz ad-din al-Qassam Brigades said Israel’s offer had not met their “minimum threshold of demands,” Arabic-language Al-Jazeera reported.

Earlier this week, Israel offered to release Hamas member Bilal Razaineh in return for either Mengistu or Sayed in a “humanitarian” exchange, since all three are determined to suffer from psychological issues.

However, the Hamas official said that the terror group was not interested in small-scale deals and demanded a “full exchange” of all prisoners released and rearrested following the 2011 deal for captured IDF soldier Gilad Shalit.

Reports have circulated that the mediators brokering the talks were Egyptian and Qatari; however, a senior Hamas official denied Egypt’s involvement, Times of Israel reported.

The IDF, meanwhile, has said that Hamas is lying low at present and has no interest in sparking a conflict in the Gaza Strip in the near future. However, there have been a number of incidents reported that fly in the face of the army’s evaluation. Ynet news reported that an Israeli soldier spotted a Hamas gunman firing on IDF soldiers two weeks ago.

In a separate incident earlier this week, a rocket landed south of the city of Ashkelon and was followed by Hamas fire on IDF forces. The IDF responded by striking four Hamas posts.