The Hamas leader made the announcement in a speech, according to Al Jazeera, after media outlets, including CNN and The New Arab, reported the proposal put forth two days ago was approved.
Israel "conveyed to the mediators a counter-proposal in full coordination with the U.S.," the office of Prime Minister Benjamin Netanyhau said Saturday night, though it did not list specifics.
The truce would start over the Eid al-Fitr holiday, which begins Sunday and ends on Wednesday at the end of Ramadan. The five hostages would then be released after Passover, which runs April 12-20.
Alexander is a dual U.S.-Israeli citizen serving in Israel's army. He was abducted in Israel during the Hamas Oct. 7, 2023, attack that killed some 1,500 Israelis. He was born in Tel Aviv and grew up in New Jersey.
The Hamas leader said the group accepted the plan for forming an independent body of experts to oversee civil administration in Gaza. Though Hamas will give up some power, he said they will not disarm.
"We would never accept dishonor and insults for our people, so no deportations and no displacement," al-Hayya said. "As for the resistance's arms, they are a red line, linked to the presence of the occupation and the establishment of an independent Palestinian state."
The proposal is similar to one presented several weeks ago by U.S. special envoy Steve Witkoff. CNN reported it is not clear whether it includes the release of additional bodies of deceased hostages, as was noted in the U.S. plan.
Israel believes 24 hostages are still alive.
In six handoffs, Israel has received 25 living Israeli hostages during the first phase of the cease-fire, along with four more deceased hostages. Israel so far has released 1,135 prisoners.
The proposal extends the phase 1 cease-fire conditions, which include allowing humanitarian aid into Gaza. Phase 1 of the original cease-fire began on Jan. 18 and ended March 1.
The new proposal also includes nearly $2 billion in funds to be distributed among top leaders of Hamas' military wing, Al-Qassam Brigades, based on their ranks.
According to Al-Araby Al-Jadeed, Al-Qassam Brigades's military council and its field commanders reiterated demands for a full Israeli withdrawal from Gaza and a comprehensive cease-fire extending to the occupied West Bank and Jerusalem.
A second-phase in the proposal calls for a permanent halt in the fighting and the Israeli military to pull out of Gaza. There also would be the return of remaining hostages and "full demilitarization" of the Palestinian enclave, according to the plan.
When the original phase 1 agreement ended on March 1, Israel renewed attacks in Gaza and imposed a complete blockade of humanitarian aid entering the enclave.
Gaza's Hamad-run health ministry announced Saturday that 921 people have been killed in the Palestinian territory since Israel resumed large-scale strikes on March 18.
The ministry said the overall death toll had reached 50,277 and 114,095 injured since the war began on Oct. 7, 2023.
Israel said at least 1,139 people were killed in Israel during the attacks and more than 200 were taken captive.
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