GAZA, July 1: Israel on Saturday rejected demands from Palestinian militants who have captured an Israeli soldier to free 1,000 prisoners from its jails and kept up air strikes on Gaza.

A Palestinian official said Corporal Gilad Shalit was alive and stable after being treated for wounds. The soldier’s seizure in a raid across the Gaza Strip’s frontier last Sunday has sparked a crisis that has sent Israeli-Palestinian relations to new lows and dashed any chance peace talks might be revived.

“Prime Minister Ehud Olmert has reiterated that there will be no deal, that either Shalit will be released or we will act to bring about his release,” said Israeli Foreign Ministry spokesman Mark Regev, responding to the fresh demands.

A statement from the militants did not specify that freeing the 1,000 Palestinian and Arab prisoners and ending Israel’s Gaza assault would be in exchange for Shalit’s freedom.

But a spokesman for the Hamas armed wing, one of the three groups that have captured Shalit, said that was what it meant.

The Hamas government, already straining under a US-led economic embargo to force it to recognise Israel, has said it had no prior knowledge of the militants’ raid.

Meanwhile, Israeli aircraft on Saturday fired missiles at ‘training camps and access routes used by militants to fire rockets at the Jewish state,’ but kept on hold a threatened ground assault into northern Gaza. There have been few casualties so far.

Artillery also fired barrages at ‘areas used by militants.’

MEDIATION IN TROUBLE: The positions of both Israel and the militants have cast doubt on hopes that Egyptian-led diplomatic efforts could soon free Shalit, a 19-year-old tank gunner.—Reuters