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By Nidal al-Mughrabi and Jeffrey Heller GAZA/JERUSALEM (Reuters) - Prime Minister Benjamin Netanyahu said on Sunday any deal on Gaza's future had to meet Israel's security needs, warning Hamas it faced "harsh strikes" if it resumed firing into the Jewish state. Both sides say gaps remain in reaching a long-term deal that would keep the peace between Israel and militant groups in the Hamas Islamist-dominated Gaza Strip, and open the way for reconstruction aid to reach the battered enclave. Late on Sunday, a Palestinian official said Israel's position in the talks, as presented to them by Egyptian mediators, were a "retreat from what had already been achieved and discussions had returned to square one." The official, who was not named, told Egypt's official news agency MENA that Israel had toughened its stance and had placed "impossible" demands, particularly on security issues. "We are determined to achieve the demands of our people and foremost is ending the aggression and launching the rebuilding process and lifting the Israeli-imposed blockade of the Gaza Strip," MENA quoted the official as saying.More...