Abu Saad is not really following the peace talks being brokered by the US secretary of state, John Kerry. Gripping an M16 automatic rifle, his face masked by a red keffiyeh headdress, the camouflage-clad Palestinian fighter wants to talk about defending Gaza against Israeli attacks – ceasefire or no ceasefire.

In a safe house reached by a circuitous route, he and other members of the military wing of the Popular Resistance Committees (PRC) are flaunting their weapons and defiance at a time when the truce with Israel is looking fragile. Under his balaclava, another man's eyes flicker as he registers the sound of a drone hovering above – an ominous reminder of their enemy's reach. "There are planes in the sky," he warns. A hurried consultation follows over the squad's radio.

The alarm is understandable. On Thursday last week, Israeli soldiers shot dead a Palestinian in the exclusion zone close to the border fence. Three other men were injured. The next day the PRC's Nasser Salah al-Din Brigades fired two Grad missiles into Israeli territory in response to what they called "the crimes of the occupation". Three days later Israeli troops dismantled a 20kg bomb buried near Khan Yunis.

"Our target bank is always ready," says Abu Saad. "We are well prepared." Israel says 43 missiles have been fired from Gaza this year so far. Few have caused any damage or injuries.

Hamas, the Islamist movement that rules the Gaza Strip, is committed to the agreement that ended Israel's last big offensive, in late 2012. "Israel follows a policy of collective punishment but we are concerned to keep the situation calm and under control," says Ghazi Hamad, its deputy foreign minister. "We are not interested in any kind of confrontation. But if we were not in control there would be many more missiles."

Islamic Jihad, a smaller faction backed by Iran, also respects the ceasefire. Israel says it is committed to it, too, but Palestinians and others complain that the Israelis have failed to significantly ease restrictions on movement and access into the border enclave, and carry out raids at will. "We are committed to a ceasefire as long as the occupation is," says Abu Saad. "But Hamas is a government. Their interests are not the same as ours. Should we ask for their permission to attack when Israel violates the agreement?"

Militarily it is an unequal struggle. Israel controls almost all Gaza's land borders, its airspace and coastline. Drone strikes, helped by collaborators on the ground, have killed hundreds of Palestinians. The most recent target, Abdullah Kharti, was injured while riding a motorbike, apparently surviving only because he was not carrying a mobile phone, which would have provided a signal to guide a missile. Kharti was described by the Israeli army as a "global jihad" activist. "That's simply propaganda by the occupation," says Abu Saad. "They are trying to damage the Palestinian cause."

Abu Saad belongs to the military wing of the Popular Resistance Committee in Gaza.

Gaza's streets are plastered with posters of "martyrs". One of the oldest is of Fathi Shikaki, the founder of Islamic Jihad, who was gunned down in Malta in 1995 by agents from the Mossad. Many commemorate Ahmed al-Jaabari, the Hamas leader involved in the capture of the Israeli soldier Gilad Shalit. Assassinations disrupt and divide. Four different Islamist groups, two of them close to Hamas, shelter under the PRC's umbrella.

If the military balance is overwhelmingly in Israel's favour, few expect political change any time soon. Gaza, often described as the elephant in the room, is not being discussed in the Kerry talks. Hamas opposes the negotiations being conducted by the Palestinian president, Mahmoud Abbas, but its tone is surprisingly emollient nonetheless. "I believe we should give Abbas the benefit of the doubt," says Ahmed Youssef, who runs the Bayt al-Hikma thinktank. "He is a shrewd politician."

Hamas is in a bad way. Israel maintains pressure through the blockade, but Gaza's lifeline from Egypt has been severed since the overthrow of the Muslim Brotherhood president, Mohamed Morsi, last July. The effect, admits one senior figure, has been catastrophic. The closure of the tunnels under the border near Rafah has led to a shortage of weapons and, more importantly, cash and goods. The salaries of 40,000 government employees still need to be paid. Many of Gaza's 1.8 million people are suffering as food prices have skyrocketed, and electricity is available for only a few hours a day. The lack of raw materials has paralysed construction. Unemployment is 38%, crime is on the rise and it is hard to leave when Israel's Erez border post is closed to most and the Rafah crossing to Egypt open for just a few days a month. Begging is rife. "Its a deliberate attempt to force us to surrender," says Nafez Azzam, of Islamic Jihad.

"The Israelis do allow some things in, to show to the media," says Youssef. "They try to keep us on a diet. They will not let us become like Somalia, but they need to keep us busy worrying about food and electricity and sewage and shortages – not about politics and the struggle with Israel, not about the refugees and our long-range objectives."

Efforts at reconciliation between Hamas and Abbas's Fatah movement – opposed by Israel and the US – have not achieved much. Hanan Ashrawi, of the PLO executive committee, believes that Hamas "has to be part of the Palestinian political system" but blames Israel and Egypt for blocking a rapprochement.

It may take the collapse of current US diplomatic efforts to force the rival Palestinian camps to bury their differences. The Gaza Islamists appear to be banking on that. Agreement by Abbas would be political suicide, says Bassem Naim, an adviser to the Hamas prime minister, Ismail Haniyeh.

Hamad says: "Abbas has promised that he will consult all Palestinian factions. But my prediction is that there will be no deal. Sooner or later, Kerry will fail, unless he looks at the roots of the conflict."

Hamas and Israel are both hoping to avoid escalation. "Hamas has no illusions," says a senior Israeli official. "They understand that there are rules of the game and that there is zero tolerance for any breach of the ceasefire."

But Abu Saad and his men are players too – and they may be less concerned about the consequences.