Hamas officials in Gaza have threatened to restart hostilities "the minute" after the 72-hour ceasefire agreed with Israel expires at 5am GMT on Friday if their demands are not met.
The Palestinians are demanding that an Israeli-Egyptian blockade of Gaza must be lifted and about 100 prisoners held by Israel freed. Israel insists that Hamas must disarm, which officials from the Palestinian group said on Thursday was "inconceivable".
The declaration by Hamas raises the prospect of a further bout of fighting in a conflict in which nearly 1,900 Palestinians, most of them civilians, have died along with 64 Israeli soldiers. More than 3,000 rockets were fired from Gaza into Israel in recent weeks. Most of those headed for inhabited areas were intercepted but three civilians in Israel have been killed.
Indirect talks brokered by Egypt are continuing in Cairo but by late Thursday time was running out to preserve the fragile truce.
The statements in Gaza were echoed by members of the Palestinian negotiating team in Cairo. "If the Israelis don't agree, we will go back and fight through the tunnels," one said.
The discovery of dozens of tunnels between Gaza and Israel, which could be used to mount attacks to kill or kidnap civilians and soldiers, was cited as the main reason Israel sent ground forces into Gaza after days of aerial bombardment last month.
The destruction of the tunnels discovered by Israeli troops was also given as the reason for ending the ground operation. The new threat, however, suggests further tunnels may exist.
"All the scenarios are available. The Palestinian resistance continues and we will take actions depending on the results of the negotiations. If Israel does not respond to the demands of the Palestinian people, the Palestinian resistance can resume its activity," the delegate, speaking on condition of anonymity, said.
The joint Palestinian delegation, formed from leaders of most Palestinian factions, will meet Egyptian officials at 10pm local time on Thursday for what is expected to be a final decision about extending the ceasefire. The ceasefire was declared on Monday night, the latest in a series of attempts to halt the war.
The gap between the demands of a Palestinian delegation, which includes Hamas, smaller factions and the Palestinian Authority, and those of Israel remains substantial.
Israel is reluctant to lift the eight-year blockade of Gaza, the principal demand of Hamas, as it believes any substantial easing of restrictions would strengthen the Islamist organisation politically and, potentially, militarily too.
Ihab al-Ghussein, the deputy information minister of Hamas, said: "At 8am tomorrow our military brigades say they will continue the struggle if we do not get our demands. We have nothing to lose."
Israeli officials say Hamas has rejected an offer they have made to extend the ceasefire. Hamas has not confirmed or denied the claim.
In Gaza City today, Hamas and allied factions organised a rally in support of the Palestinian delegation in Cairo.
Thousands listened to chants praising the Islamist organisation's military wings for their victories and to speeches calling for "victory in the political battle, as in the military battle".
Though most in Gaza are supportive of Hamas, at least in public, a failure to secure any significant concessions in the talks could undermine its popularity.
Hamas and the Palestine Liberation Organisation (PLO) of President Mahmoud Abbas are officially negotiating as one in Cairo.
In April, Hamas signed a unity agreement with the PLO, which is dominated by the Fatah faction and has been at odds with Hamas for decades. The reconciliation saw the former rivals setting up a consensus government of independent technocrats that took office in June, ending seven years of separate administrations.
In 2006 Hamas won Palestinian elections, taking de facto control of Gaza the following year. Binyamin Netanyahu, the Israeli prime minister, has compared the group to Boko Haram, the Nigerian extremist movement, and the Islamic State (formerly known as the Islamic State in Iraq and Syria, or Isis), an al-Qaida splinter infamous for its brutality. Previously Netanyahu has refused to cooperate with the unity government because it included Hamas.
One area offering some potential for agreement is the possible opening of the Egyptian border crossing into Gaza at Rafah.
Israel wants Abbas's security forces to retake control of Gaza and deploy on the Palestinian side of the Rafah crossing and for international aid to be disbursed through Abbas.
Egypt has kept the Rafah crossing closed since the army's overthrow in July 2013 of the Islamist president Mohamed Morsi, whose Muslim Brotherhood movement was a close ally of Hamas.
Relations between Egypt and Hamas have collapsed since Morsi was ousted. The new regime in Egypt, one of only two Arab countries that have a peace treaty with Israel, says it has destroyed more than 1,600 cross-border smuggling tunnels leading from Gaza into the Sinai peninsula.
Israel has previously made some concessions on the blockade, easing restrictions on imports of food and construction materials in 2010 following the international outcry over a botched Israeli raid on a Gaza-bound flotilla, which left 10 Turks dead. Some restrictions were further eased after the last war between Hamas and Israel in Gaza in 2012.
Ghussein, the Hamas minister, said: "We are not asking for miracles, just stopping the war, implementing past agreements, lifting the siege. We have to show support for our delegation and ask them to be firm about our demands. There will be no white flag."
Up to 30% of Gaza's 1.8-million population has been displaced by the recent fighting and an estimated 65,000 people are now homeless. About double that number are sheltering in UN schools converted to shelters during the war.
The death toll in the conflict continues to rise as bodies are retrieved from ruined homes around Gaza. About 150 patients remain in intensive care, health officials say, out of 9,806 people treated. More than 400 children have been killed.
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