The Israeli and Palestinian foreign ministers will meet their counterparts from the European Union on Monday as the EU considers potential steps toward a comprehensive peace between the two sides even as the conflict in Gaza rages on.

The future of the EU peace plan, including the establishment of an independent Palestinian state, remains uncertain because the Israeli officials and diplomats currently display no interest in the two-state solution, while EU member states including Germany and Austria are all allies of Israel. 

Ahead of the Monday meetings, Israeli Prime Minister Benjamin Netanyahu on Sunday rejected a proposal of a ceasefire deal reportedly being advanced by Qatar, the United States and Egypt, while the Israeli army continued to pound the Palestinian enclave.

Citing Egyptian officials, a report on Sunday by the Wall Street Journal said the mediators have proposed a 90-day plan for ceasefire. In the first phase, the fighting will stop and Hamas will release all Israeli civilian hostages while Israel releases Palestinian prisoners and increases aid. The plan also includes the rebuilding of Gaza and talks for a permanent ceasefire and the relaunch of a process to establish a Palestinian state.

Netanyahu rejected the key elements of the plan, including the prospect of establishing a Palestinian state. "I will not compromise on full Israeli security control of all territory west of the Jordan River," he said in a video address to the nation, referring to the West Bank, a territory Israel captured along with the Gaza Strip in the 1967 Middle East war. 

He said that Palestinian statehood would pose "an existential danger" to Israel, without elaborating on the reasons.

Netanyahu rejected Hamas' demand for an end to the war and the withdrawal of Israeli forces from Gaza as prerequisites for releasing about 130 hostages still held in Gaza. "If we agree to that, our fighters have fallen in vain, and we couldn't guarantee the security of our citizens," he said.

After a flight over Gaza, Israeli Defense Minister Yoav Galant stated that the operation in Khan Younis, previously considered a safe zone, "will soon expand. Smoke will continue to cover Gaza's skies until our goals are achieved – the collapse of Hamas and the return of hostages."

Health situation in Gaza 'catastrophic'

The Gaza-based Health Ministry said on Sunday that the health situation in the strip is "catastrophic and painful" amid the ongoing Israel-Hamas conflict.

"The accumulation of cases and the lack of treatment facilities in hospitals accelerate the loss of lives," the ministry's spokesperson Ashraf Al-Qedra said, adding that "hospitals in the southern Gaza Strip are unable to provide health services normally, and the situation is exceeding their capacity."

The spokesperson noted that 70 percent of the medical aid that entered the enclave is outside the scope of the basic needs of local hospitals, and 99 medical personnel are still under Israeli detention.

Earlier on Sunday, the ministry said that the Palestinian death toll due to the ongoing conflict has risen to 25,105 since October 7, 2023.

Ripple effects

While the Gaza fighting continues, Yemen' Houthi movement has vowed to keep up attacks at Red Sea ships despite a string of U.S. recent strikes at its radar and missile capabilities. 

Attacks on commercial ships by Yemen's Houthi movement, who say they are acting in protest of Israel's military campaign in Gaza, have imperiled a vital global shipping route through the Bab-el-Mandeb strait that lies between Yemen and Djibouti and connects the Gulf of Aden and Red Sea.

The disruption has forced more shipping companies to divert around the Horn of Africa, upending supply chains and increasing costs.

Average worldwide costs of shipping a 40-foot container rose 23 percent in the week through January 18 to $3,777, according to London-based Drewry Shipping Consultants, more than doubling in the past month.

(With input from agencies)