Prime Minister Ehud Olmert said on Saturday Israel would not agree to any truce with the Hamas rulers of the Gaza Strip without the release of an Israeli soldier seized by Palestinian fighters in 2006.
"The position of the prime minister is that Israel won't reach any arrangement on a truce before the release of Gilad Shalit," Olmert's office said in a statement.
Israel wants to tie any ceasefire deal with Hamas in Gaza to the release of soldier Shalit, held in the Palestinian enclave since 2006 when he was caught in a cross-border raid.
Egypt has been struggling to mediate a lasting truce between the two sides since a massive three-week war in Gaza was halted by separate ceasefires on Jan. 18 that have since been strained by tit-for-tat exchanges of fire.
Hamas said on Thursday it expected a longer-term, Egyptian-mediated truce with Israel in Gaza to be announced in two or three days, cementing the truce that ended a 22-day Israeli offensive.
One of the conditions being demanded by Hamas is that all the crossings into the enclave be opened, bringing an end to the Israeli blockade imposed when Hamas seized Gaza in 2007.
Hamas has demanded that the release of Shalit be negotiated as part of a separate prisoner exchange involving hundreds of people held in Israeli jails.
On Thursday, senior Hamas leader Khaled Meshaal told Libyan television that "until now there is no agreement concerning Shalit."
Israel is trying to mix up the files and link his fate to the opening of the crossings (into Gaza)."
Egyptian security chief Omar Suleiman has been leading separate negotiations with Israel and Hamas and has said efforts were under way to draw up a list of Palestinian prisoners that might be released in exchange for Shalit.
While Hamas has demanded an end to the blockade, Israel has insisted that will happen only when Hamas releases Shalit.
Earlier on Saturday, Hamas spokesman Fawzi Barhum accused Israel of "backtracking" on the talks by demanding an open-ended agreement and stepping up attacks on the group's Gaza enclave.
The two sides have been struggling to reach a formal truce in the wake of the Israeli offensive that killed some 1,300 Palestinians and 13 Israelis and left vast swathes of the impoverished territory in ruins.
Missile evades warning system
Palestinian forces have fired more than 40 rockets and mortar rounds at southern Israel since the end of the war and the Jewish state has carried out several air strikes targeting suspected militants and smuggling tunnels.
On Saturday, the Israeli army said a longer-range Grad-style rocket fired by Gaza militants had evaded its early warning system and struck the seaside town of Ashdod, 38 kilometers (23 miles) north of Gaza.
The rocket was believed to have been fired on Friday evening, as militants launched shorter-range rockets and a mortar round, prompting a series of Israeli air strikes that killed one alleged militant and wounded nine other people.
Last week Israel held general elections in which right-wing parties -- which have vowed tough action against Hamas in Gaza -- made major gains, casting further doubt on the truce talks.