From the article cited : https://www.axios.com/2024/08/18/hamas-rejects-us-ceasefire-hostage-proposal

More specifically, Hamas objects to the fact that the proposal doesn't include a permanent ceasefire or comprehensive Israeli withdrawal from the Gaza Strip.

Or from https://edition.cnn.com/2024/08/19/middleeast/blinken-israel-herzog-ceasefire-talks-intl-hnk/index.html for example :

Netanyahu shot back, saying Israel will not be “giving in to Hamas’s demand” to end the war in Gaza as a condition of a deal.
“The Prime Minister has strongly insisted on this fundamental demand, which is vital to achieving the goals of the war, and Hamas changed its position,” a statement from his office said Sunday. “The Prime Minister will continue to work on advancing a deal that will maximize the number of living hostages and which will enable the achieving of all of the war objectives."

Meanwhile, i've read 3 newspapers articles this morning(, in french), and they were only talking about the Egypt-Gaza border as the reason for why the deal was refused.

Edit : I guess it's implied that a permanent ceasefire will follow in the "second phase", and a reconstruction in the third one. This comment was useless, sorry, it seems indeed that the problem came from the new israeli demands.
It won't end the many problems that Palestinians have to face, including the colonization, their many hostages, and everything else.
If Israel can't offer anything, and its allies won't offer anything else, then they can still offer to be an islamic sect with jewish characteristics, recognizing Muhammad's prophethood(, peace be upon him), and their neighbours as sisters/brothers, as one community. They wouldn't lose anything really but add traditions on top of their current ones, while staying different, muslims waited a long time to be accepted by the previous generation. It'd help, Israel would be an islamic land, more specifically of the old jewish sect who celebrates Muhammad as the last Prophet, but with other muslims as well.
If Israel took the heart of France, then we wouldn't care as long as they fused with the rest of France later on.