'Talks with Hamas failed' over prisoner

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Israel's outgoing government will not be able to win freedom for a soldier held in Gaza for nearly three years, Israeli officials and the soldier's father indicated today, after the Cabinet heard a discouraging report on the failed talks with Hamas in Cairo.

An Israeli official said efforts would continue, but there was disagreement over nearly a third of the hardcore prisoners Hamas was demanding in return for the soldier, Sgt. Gilad Schalit, 22. The official said Israel would maintain its blockade on Gaza until the soldier is back home.

Prime Minister Ehud Olmert planned to make a nationally televised statement Tuesday evening, his office said. But even before that, meeting participants signaled they had abandoned the negotiations and would turn over the matter to the incoming government of Benjamin Netanyahu.

"The prime minister was prepared to make far-reaching concessions, far beyond what some of the ministers were willing to do," Justice Minister Daniel Friedmann told reporters after the meeting. "Hamas' demands reached proportions that no Israeli government could accept."

"Hamas will also discover that there are lines that Israel is not willing to cross," he added.

As ministers discussed the faltering deal, Schalit's parents and brother sat outside Olmert's office, wearing T-shirts with the soldier's picture that said "help."

After a briefing from Olmert, the soldier's father, Noam Schalit, held out no hope that the Olmert government would win freedom for his son, saying only that it would be "a basis for the next government to continue the efforts."

Throughout the day, prospects further deteriorated, with Israel and Hamas accusing each other of undermining the negotiations.

Even so, Hamas leaders voiced hope for a last-minute breakthrough.

"The door is not closed. We believe the occupation is going to retreat," Osama al-Muzeini, a Hamas leader in Gaza, told the group's radio station Tuesday afternoon.

The Islamic militant group is seeking the release of hundreds of Palestinian prisoners in exchange for Schalit, including dozens convicted in deadly attacks on Israelis.

Israel is holding an estimated 8,000 Palestinian prisoners in its jails, and Hamas wants some 1,200 freed, including 450 who masterminded or were otherwise involved in suicide bombings and other deadly assaults.

Israel balked at approving the entire list and wanted to deport some of the more notorious prisoners, fearing they would resume their militant activity if they returned home, Israeli officials said.

The Israeli official, speaking on condition of anonymity because of the sensitivity of the issue, said Israel agreed to free 320 of the 450 prisoners. He said a deal could still be struck if Hamas presented a new list of 450. That would be most unlikely after a year of contacts, with Hamas saying it would not compromise.

"The Zionist occupation is trying to maneuver on the number of the prisoners, trying to exclude some of the names we listed, or to deport dozens of them, and this is rejected by Hamas," Hamas official Salah Bardawil said.

Hamas officials say the list includes the Palestinians' highest-profile prisoner, Marwan Barghouti, considered a likely successor to Palestinian Authority President Mahmoud Abbas. Barghouti has spent the past seven years in an Israeli prison for his role in attacks that killed four Israelis and a Greek monk.

A continued impasse over Schalit could have far-reaching consequences for war-battered Gaza, especially regarding Israel's ongoing blockade.

As long as the blockade is in place, Gaza cannot import the construction materials and equipment it desperately needs to rebuild after a fierce Israeli offensive early this year.

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