Systematic large strain compression measurements have been performed on polyelectrolyte hydrogels based on modified PAA crosslinked by bifunctional thiols. For compressive strains larger than a critical value depending on polymer concentration, we observed a significant hysteresis, strain-hardening and a stress plateau during unloading. This was attributed to strain-induced ionic clustering due to electrostatic interactions that can become attractive if chains are close enough to each other. This phenomenon is dynamic and reversible but a long lifetime for the clusters has been identified. Although clustering between like-charge chains has been reported for hydrogels, it is the first time that this phenomenon is caused by deformation. This effect is potentially important as we strive to understand the behaviour of all polyelectrolyte hydrogels at large strains which are highly relevant for fracture properties.