The exiled political leader of Hamas is demanding that Israel release Palestinian prisoners to win freedom for a captured Israeli soldier. Khaled Meshaal spoke at a rare news conference under tight security in Damascus.

Hamas political leader Khaled Meshaal demanded that Israel free Palestinian prisoners in exchange for the release of the Israeli soldier, who was captured by Palestinian militants two weeks ago in a raid on an Israeli border post in the Gaza Strip.

"The solution is simple: an exchange," said Khaled Meshaal. "Israel is deluding itself, if it thinks it will bring the soldier back by military escalation."

Israel has ruled out a prisoner release in exchange for the captured soldier's freedom. Israeli Prime Minister Ehud Olmert has also ruled out negotiations with the Hamas-led Palestinian government.

The State Department, European Union, and Israel consider Hamas a terrorist organization.

Meshaal said Hamas is interested in a peaceful solution, and accused Israel of escalating the situation.

Israeli troops entered the Gaza Strip two weeks ago, after Palestinian militants captured the Israeli soldier, and there has been heavy fighting, in which at least 50 Palestinians and one Israeli have died.

The Israeli prime minister says the military campaign will continue until the soldier is freed and Palestinian militants stop firing rockets into Israel. He rejected criticism of Israel's military incursion.

Meshaal criticized the international community for focusing on Israel, rather than the plight of Palestinians.

"It has been a matter of days that this soldier has been captive, yet the world has put it on the top of the agenda, while 10,000 Palestinian prisoners have been in Israeli custody for 20 years, but the world forgets about them," he said.

Hamas officials have demanded Israel free more than 1,000 Palestinian prisoners.