Israel’s prime minister made the release of captured soldier Gilad Shalit a condition of peace in the besieged Gaza Strip on Saturday.
Egypt has been mediating in indirect ceasefire talks between Israel and the Hamas government for the past month, since Israel unilaterally halted a brutal three-week offensive against the territory.
Under an emerging truce deal, Israel would gradually ease its border blockade of Gaza in exchange for a halt to weapons smuggling and rocket and mortar attacks by militants.
Egypt has also brokered parallel talks on a prisoner swap – hundreds of Palestinians held by Israel in exchange for Israeli soldier Gilad Shalit, captured by Palestinian resistance fighters in a cross-border raid in June 2006.
Progress has been reported in those negotiations, with the remaining dispute apparently focusing on several prisoners involved in particularly bloody attacks on Israelis.
Hamas has sought to separate the truce deal from the prisoner swap. However, outgoing Israeli premier Ehud Olmert has linked the two.
A statement from his office said: ‘The position of the prime minister is that Israel will not reach any understandings regarding the calm before the release of Gilad Shalit.’
Hamas is seeking a minimum 18-month ceasefire.
But Hamas spokesman Fawzi Barhoum and Hamas legislator Salah Bardawil said that Israel had renewed demands for an open-ended ceasefire.
Mr Barhoum said that Hamas had drafted its final version of a truce deal and presented it to Egypt. ‘Israel returned to ask for an open-ended calm without a ceiling,’ he said, adding that Egypt is trying to bridge the gap.
Egypt will also host reconciliation talks between Hamas and the rival Fatah movement of Palestinian President Mahmoud Abbas on February 22.
Hamas defeated an attempted coup in Gaza by security forces loyal to Fatah in June 2007.
Hamas and Fatah officials held preparatory talks in Cairo in recent days. Both sides reported a positive atmosphere and said that they had talked about the fate of political activists held by Hamas in Gaza and by Fatah in the West Bank.
Fatah negotiator Nabil Shaath said that the two sides had agreed to halt all verbal attacks and solve the prisoner issue. Asked if prisoners would be released, Mr Shaath said: ‘Yes, I think we will start before the twenty-second.’