Israel says indirect negotiations with the militant Islamic group Hamas have failed. Prime Minister Ehud Olmert says his government will not accept the group's demands in exchange for the release of Gilad Shalit, an Israeli soldier seized by Palestinian militants and taken to Gaza in 2006.
Israel and Hamas aimed to reach a truce mediated by Egypt that would include Israel's lifting of its blockade on border crossings into Gaza. In addition to the opening of borders, Hamas wanted Israel to release more than 1,000 prisoners, including 450 who Israel says were involved in terrorist attacks against Israeli civilians. Israel linked any lifting of the blockade to the release of Gilad Shalit.
In the end, Israel refused to add the names of some prisoners to the list of those it would free, and it demanded that some be deported upon their release.
In remarks after a cabinet meeting on Tuesday, Prime Minister Ehud Olmert said Israel would not agree under any circumstances to the terms that Hamas presented.
Mr. Olmert said there are red lines and that Israel would not cross them.
The two sides traded blame for the failure of negotiations. Hamas spokesman Osama Hamdan accused Israel of undermining the talks.
He said Israel agreed in principle to the prisoner exchange. But he said the problem started when it came to the names of those who would be released. He said Israel insisted on having Hamas free Gilad Shalit first.
Israeli Justice Minister Daniel Friedmann spoke to reporters after Tuesday's cabinet meeting.
He said the Israeli prime minister was prepared to make far-reaching concessions. But, he said, Hamas' demands reached proportions that no Israeli government could accept.
Hundreds of Israelis demonstrated on Tuesday, urging the government to keep up efforts to free Shalit. The soldier's parents, meanwhile, camped outside the prime minister's office.
Israeli officials say they will continue their efforts to gain the soldier's release, but that it would likely be under the country's next government.
Mr. Olmert is due to leave office in several days. Benjamin Netanyahu is under an April 3rd deadline to form a coalition government -- one that will likely be dominated by hardliners who are less disposed to make concessions to Hamas.
Daniel Diker is a foreign policy analyst with the Jerusalem Center for Public Affairs. "The other, more strategic option for Israel is to wait until this government in the coming days finishes its term. And then, you will have what in all likelihood looks like a Netanyahu coalition, and they will then go back to square one and begin to approach this issue from a different vantage point," he said.
During his campaign, Mr. Netanyahu called for the toppling of Hamas.
Israel on Tuesday said it will maintain its blockade on Gaza's borders until Gilad Shalit is released.
The failure of the talks means further setbacks for recovery efforts on the Gaza Strip. Israel is preventing the transport of concrete and steel -- materials needed for reconstruction after the recent Israeli offensive that destroyed thousands of homes.