The United States has said it still seeks a deal to free Gaza hostages after a deadly Israeli strike in crowded Rafah freed two captives, as it renewed warnings over a wider Israeli operation, AFP reports.

“There were a number of really untenable items in the proposal that came back from Hamas, but we do believe that a deal is possible and we’re going to continue to pursue it,” State Department spokesman Matthew Miller told reporters.

“We think the benefits of a pause and a deal for hostages are tremendous, not just obviously for the hostages who would be released but also for the humanitarian effort in Gaza and for our ability to begin to pursue a real and lasting, sustainable resolution of this conflict,” he said.