Israel Demands Release of Captured Soldier in Return for Gaza Deal

Israel toughened its conditions for a ceasefire with Hamas yesterday, saying no deal could be reached before the Palestinian Islamist group freed an Israeli soldier captured nearly three years ago.

In an unanimous decision, Israel's security cabinet agreed to maintain the tough economic blockade on Gaza and hold back from a truce agreement until the release of Gilad Shalit, the army sergeant who was captured in June 2006 close to the Gazan boundary fence.

Israel's prime minister, Ehud Olmert, said at the cabinet meeting: "I don't think we need to open the crossings until the issue of Gilad Shalit is resolved."

Hamas has demanded Israel release 1,400 Palestinian prisoners in return for handing over Shalit, who is thought to be still alive. Few believe a deal is likely in the short term, which means reconstruction materials, including concrete, metal and glass, are unlikely to enter Gaza to rebuild the damage after Israel's devastating war in the territory last month.

Until now it had appeared that the negotiations to secure the release of Shalit were separate to talks on drawing up an Egyptian-mediated ceasefire with Hamas in Gaza.

However, in recent weeks Olmert has been pressing to have a demand for Shalit's release at the center of the negotiations. He has only a few weeks left in office, following Israeli elections last week, and is thought to be eager to win the release of Shalit before his term is out. "Three years have passed and we think we cannot come to any agreement with Hamas or Egypt without solving the issue of Gilad Shalit," said Meir Sheetrit, a cabinet minister.

In a statement after the meeting, the Israeli government said the restrictions on the Gaza crossings would remain and that freeing Shalit was the first priority. "Expanded activity at the crossings will be discussed upon the release of Gilad Shalit," it said.

Not everyone in his cabinet had agreed with this stance.

The defence minister, Ehud Barak, had reportedly favored a ceasefire agreement with Hamas separate to negotiations over the release of prisoners in return for Shalit.

However, Barak and his Labour party performed badly at the polls last week and he is unlikely to be reappointed defence minister in a new government, which may have weakened his negotiating position within the cabinet.

Egyptian officials were reportedly surprised at the new conditions and said they had always thought the ceasefire and the Shalit release were separate issues. Hosni Mubarak, the Egyptian president, was quoted on Tuesday as saying Shalit's release should "in no way be linked to the truce negotiations".

Growing differences have reportedly emerged on the ceasefire negotiations between Olmert and Amos Gilad, the most senior Israeli defence ministry official.

In yesterday's Maariv newspaper, Gilad was quoted speaking to a "close associate" in unusually frank terms, in which he appeared to criticize Olmert's approach.

"I don't understand what it is that they're trying to do. To insult the Egyptians? We've already insulted them. It's madness. It's simply madness. Egypt has remained almost our last ally here," Gilad was quoted as saying.

He said that Shalit would be freed quickly if Israel approved a list of names of prisoners to be released in return.

Separately, the Israeli president, Shimon Peres, was beginning talks last night with political party leaders to decide who will be given the chance to form a coalition government and become prime minister, a week after general elections.

Tzipi Livni, foreign minister and head of the Kadima party, narrowly won the elections, but her rival Binyamin Netanyahu, leader of the rightwing Likud opposition party, is thought more likely to be given the job because the rightwing parties as a whole fared better in the polls.