Palestinian militants from different factions are seen during a meeting with journalists in the Bureij Refugee Camp, central Gaza Strip, July 1, 2006

Gunmen from the ruling Islamic militant group Hamas and two other groups are demanding the release of an additional 1,000 Palestinian prisoners held in Israel, in exchange for freedom for the kidnapped Israeli soldier. Earlier, they demanded the release of another 500 Palestinian prisoners.

Israel rejected the demand, saying the soldier must be released unconditionally. Israeli Ambassador to the United Nations Danny Gillerman says negotiating with terrorists would send the wrong message.

"This is indeed part of the international, global war against terror. And, if we want to preserve civilization as we know it, and if we want to prevent future acts of hostage-taking and kidnapping, this must be resolved, must be resolved quickly," he said.

Israel is keeping up the pressure militarily, with warplanes and artillery continuing to pound Gaza. Israeli tanks and troops are poised for a ground invasion, but that has been put on hold to give international diplomacy a chance to free the captive soldier.

Moderate Palestinian President Mahmoud Abbas has appealed to the "Quartet" of Mideast mediators - the United States, European Union, United Nations and Russia - to restrain Israel. Palestinian spokesman Nabil Abu Redeineh.

"The president is urging the Quartet, and especially the United States, in order to put all the needed pressure on Israel to stop their threats and escalation, so that the president would succeed to find a solution, a positive solution, for the issue of the kidnapped soldier," he said.

Israel holds the Hamas-led government responsible for the kidnapping. Israeli troops have arrested more than 60 Hamas officials, including eight Cabinet ministers since the soldier was abducted a week ago, and it is threatening to assassinate top leaders. Hamas says Israel is using the kidnapping as a pretext to topple the Palestinian government.