In Gaza: Israel steps up pressure with shells, tanks and air strikes

Israel yesterday rejected a demand from the three militant groups holding a 19-year-old Israeli soldier for the release of 1,000 prisoners, as time appeared to have all but run out for a peaceful resolution to the military stand-off in Gaza.

Amid repeated artillery shelling of open areas in this northern Gaza town, the three factions that abducted Corporal Gilad Shalit demanded not only that women and minors held in Israeli jails be released but also that another 1,000 "Palestinian, Arab and Muslim" prisoners be freed in exchange for his safe return.

Israel insisted it would accept only the "unconditional" release of Cpl Shalit, seized during a raid on an army post just outside Gaza, which killed two other Israeli soldiers last Sunday. Mark Regev, the Foreign Ministry spokesman, said: "Prime Minister Ehud Olmert has reiterated that there will be no deals, that either Shalit will be released or we will act to bring about his release."

Israel's response came as a member of the Hamas-controlled Palestinian government said in Ramallah that Cpl Shalit had been given medical treatment for wounds sustained during the raid on the Kerem Shalom border base and was in "stable" condition.

In the first apparently credible public account of the corporal's condition, the Deputy Minister for Prisoner Affairs, Ziad Abu Ein, said that unidentified "mediators" had told him the soldier had sustained three wounds. "He was treated by a Palestinian doctor. He is fine now," he said.

With no sign of an 11th-hour breakthrough in the diplomatic efforts being led by senior Egyptian officials to secure Cpl Shalit's release, Mahmoud Abbas, the Palestinian President, called for "all parties" to find the "acceptable solution" that, he acknowledged, had eluded them so far.

Israeli troops and tanks were massed on the border of northern Gaza and in the long-closed Gaza International Airport near the southern border town of Rafah. Yesterday afternoon around five tanks and bulldozers moved across the border into the mainly empty Abasan area, east of Khan Yunis.

Israeli troops and Hamas gunmen exchanged fire and at least one Israeli bulldozer was hit by a rocket-propelled grenade. A statement from Mr Abbas's office warned: "The next hours are critical, sensitive and serious." It said the President was still "exerting efforts to stop the Israeli aggression and avoid more disasters for the Palestinian people".

In Beit Hanoun, where civilian residents were leafleted on Thursday to warn them to stay off the streets because of an impending military operation, two missiles struck early yesterday at the main entry road to the town. The army said this was one of seven overnight air raids on "access routes in the central and northern Gaza Strip used by terror organisations in their activities against Israel".

The attack had made a large crater in each lane of the road to the town, outlying areas of which have, in the past, often been used to launch Qassam rockets across the border at the neighbouring Israeli town of Sderot. Traffic could still pass, but with difficulty,.

Samir Abu Shakfa, 43, was one of a local team of engineers repairing the main power cable to the town which he said had been damaged in the missile attack. "Let [the Israelis] do whatever they want to hit the people they are looking for," he declared. "Let them hit the roads if they have to. But they should spare the infrastructure. How does it help them to hit the electricity? Life depends on it."

Israeli media suggested last week that the army had been expecting residents to start leaving Beit Hanoun after the leafleting, which warned that Israeli forces planned to stay in Gaza - not only until Cpl Shalit had been released but also as long as it took to protect "the security of Israeli citizens" - a reference to the goal of halting rocket launches.

But there was no sign of an exodus yesterday, despite the artillery fire and "sonic booms" generated by overflying F16 jets.

Jawaher Dourraj, 24, who manages a pharmacy in Beit Hanoun, said: "It is a nightmare and we are afraid. But we will be patient and continue living." Ms Dourraj said of Cpl Shalit's abduction: "There should be a price. They should release prisoners and they should release the soldier."

Aid agencies have been warning of an imminent humanitarian crisis in the poverty-stricken Gaza Strip. There have been power cuts since the six transformers at Gaza's only power station - which supplies up to half the electricity in the Strip - were destroyed by Israeli missiles, and there have been shortages of fuel to run emergency generators for water-treatment plants and hospitals.

Israel insisted yesterday there were still "1.3 million litres of fuel" in Gaza petrol stations, but said it would "work to transfer" fuel and goods into Gaza "in the coming days".

The veteran Israeli peace activist Uri Avnery appealed on Al-Jazeera to Cpl Shalit's captors to give details of his condition, and proposed a deal under which the soldier would be released in return for a promise - made to, and guaranteed by, the Egyptian President, Hosni Mubarak - torelease an agreed number of prisoners.

But Mr Regev said demands for the Cpl Shalit's unconditional release came from Europe and the US as well as Israel.

Diplomats say Israel,over the past few days, has allowed a period for diplomatic efforts with a view to strengthening the "legitimacy" of the military operation it seems increasingly likely to judge as necessary.