Israel-Gaza updates: IDF says 2 hostages rescued from Gaza

Israeli Prime Minister Benjamin Netanyahu on Wednesday rejected the current proposed hostage and cease-fire deal, calling it "delusional," and describing it as a "surrender" that would lead to another massacre. But Netanyahu did not say negotiations were closed.

To the families of the hostages, Netanyahu said in Hebrew, "Your loved ones are always standing before my eyes. ... We do not stop working for the release of our abductees -- even now."

"The continuation of military pressure is a necessary condition for the release of the abductees," he said. "Surrendering to the delusional demands of Hamas ... not only will not lead to the release of the abductees, it will only invite another massacre."

Netanyahu also said it would be "a matter of months" to reach Israel's objectives and achieve "total victory" of completely dismantling Hamas in the Gaza Strip.

Netanyahu said he told Secretary of State Antony Blinken in their meeting Wednesday, "We are within touching distance of a complete victory, which will also be the victory of the entire free world -- not only of Israel."

Netanyahu also said the Israeli military operation will expand to the city of Rafah, where thousands of Gaza residents have fled and are living in makeshift shelters.

-ABC News' Anna Burd and Jordana Miller

Egypt and Qatar will co-host a new round of negotiations on the proposed hostage and cease-fire deal on Thursday in Cairo, Egyptian state TV reported.

U.S. Secretary of State Antony Blinken met with Israeli Prime Minister Benjamin Netanyahu in Jerusalem on Wednesday.

First, Netanyahu and Blinken "held a long and in-depth meeting in private" before having "an extended meeting" with other Israeli and U.S. officials, according to a statement from the Israeli Prime Minister's Office.

During the meeting, Blinken reaffirmed Israel’s right to eliminate the threat posed by Hamas and the need to protect civilians in Gaza, according to the State Department. Blinken also stressed the importance of a two-state solution -- a prospect Netanyahu has vocally opposed.

It's Blinken's fifth trip to the Middle East since Oct. 7 when war erupted between Israel and Hamas, the militant group that rules the neighboring Gaza Strip. The United States, along with Egypt and Qatar, has been involved in negotiations between the warring sides.

-ABC News' Jordana Miller, Shannon Crawford and Morgan Winsor

The U.S. House failed to pass a $17.6 billion standalone bill to provide aid to Israel.

The bill failed 250-180 during a vote Tuesday evening.

The GOP measure was being considered under suspension, which required a two-thirds majority to pass.

House Speaker Mike Johnson, who unveiled the standalone bill over the weekend, blamed President Joe Biden and Senate Majority Leader Chuck Schumer for its failure.

"The decision by President Biden and Leader Schumer to torpedo this bill to aid the Israeli people in their fight against Hamas is a disappointing rebuke to our closest ally in the Middle East at their time of great need," Johnson said in a statement following the vote.

The Biden administration had issued a veto threat to the bill on Monday, saying it "strongly opposes" the measure after a bipartisan group of senators came to an agreement on a national security supplemental that includes Israel aid.

Schumer said he was against the bill and wanted Israel aid coupled with aid for Ukraine, Taiwan and the border.

-ABC News' John Parkinson and Lauren Peller