Alan Johnston was abducted at gunpoint in Gaza on 12 March
In a video shown on al-Jazeera TV, a masked man said to be from the Army of Islam said there were "developments" in meetings with Hamas.
But he maintained that the reporter could still be killed if their demands were not met.
The BBC said it was aware of the video and was watching developments closely.
Mr Johnston, 45, was abducted on 12 March in Gaza City on his way home.
Militants purportedly belonging to the Army of Islam posted a video on the internet on 1 June showing the first pictures of the reporter, in which he said he was being well treated.
Mr Johnston was the only Western reporter permanently based in Gaza and his abduction has triggered appeals for his release from lawmakers and rights groups around the world.
More than 160,000 people have now signed an online petition calling for his release.
'Security concerns'
In the video shown on 17 June, the masked spokesman repeated demands for the release of Islamist prisoners, in particular Palestinian-born cleric Abu Qatada, who is detained in the UK.
"There are developments and we will let you know when there are new developments," he said.
"...If they do not meet these demands there will be no release of this prisoner, but if things get worse we will get closer to God by killing this journalist."
The video was shown hours after a Hamas representative said Mr Johnston would be released soon.
Speaking at a news conference in the Iranian capital, Osama al-Mouti said Hamas was trying to secure his freedom without meeting the group's demands.
He said if Mr Johnston was not freed soon, it would only be because of concerns for his security.
On Friday, Hamas said it would no longer allow the journalist to be held captive and that it was in contact with Mr Johnston's abductors.
Bush House, home of the BBC World Service
A spokesman for the Hamas organisation has indicated that the BBC reporter Alan Johnston kidnapped in Gaza on 12 March would be released within hours. 

"The BBC journalist will be released within the next hours, today", said Abu Osameh al-Mo'ti, Hamas spokesman from Iran.

Sami Abu Zuhri, a Hamas official in Gaza was however more cautious about the situation, saying that "There are encouraging indicators that he will be released in the near future. But we cannot determine this in terms of hours." 

Later, a spokesman for the group said to be holding Alan, the Army of Islam denied the release was imminent. The group is demanding that Abu Qatada, described by the United Kingdom government as "significant international terrorist", be released and said that "If they don't meet these demands there will be no release of this prisoner."  

Earlier this month Johnston appeared in a video in which the group holding him demanded that Britain released Muslim prisoners.

The UK Foreign Office described the ongoing confusion as distressful to Alan Johnston's family and friends. The BBC has said that "We are watching developments very closely."