Captured Corporal is Still Alive, Says Hamas Leader

Khaled Meshal, the head of Hamas, said yesterday that an Israeli corporal captured near Gaza two years ago was still alive.

Meshal, who lives in exile in Damascus, said Gilad Shalit was being held captive and would not be freed until Israel agreed to release several hundred Palestinian prisoners.

Egypt has been helping to negotiate a deal under which about 1,000 prisoners would be released in stages. But Meshal said Israel rejected some of the names on the list. Among the prisoners Hamas wants freed is Marwan Barghouti, a popular former leader of the Fatah movement.

"We gave Egypt the list of prisoners' names but Israel rejected most of them because they considered them to be prisoners with blood on their hands," Meshal told Associated Press. He also said that efforts to agree a ceasefire between Israel and Hamas in Gaza had not been successful.

Separately yesterday, the Israeli organisation Peace Now said Israel had approved the construction of nearly 1,700 homes in settlements in the West Bank and East Jerusalem since beginning peace talks with the Palestinians four months ago. Condoleezza Rice, the US secretary of state, also met Mahmoud Abbas, the Palestinian president, in Jordan yesterday. She said peace talks were "moving in the right direction", though she also said Israel should stop settlement building. "Settlement activity should stop - expansion should stop," she said.

An additional 1,400 homes are reportedly planned in two settlements in East Jerusalem and in the West Bank but Ehud Olmert, Israel's prime minister, said Israel had not breached any of its commitments. "All the reports of dramatic construction projects in the territories are not true, and it's not true that we're building in violation of commitments that were made," Olmert told a meeting of his Kadima party.