Israel signaled that any truce with Hamas in Gaza would be conditioned on the release of captive soldier Gilad Shalit.
Egyptian mediator Omar Suleiman held high-level talks in Israel on Monday about a Hamas proposal for a six-month cease-fire in Gaza accompanied by a lifting of the economic embargo
on the territory.
Israel, which had previously rebuffed to the idea, appeared to be conditioning acquiescence on Hamas first freeing Shalit, a soldier it has held since June 2006.
Defense Minister Ehud Barak's office said after his discussions with Suleiman that Shalit was a "central factor" in "reaching a security arrangement in Gaza," though Israel would remain firm on its other demands that Palestinian arms-smuggling and attacks also cease completely.
Suleiman met Prime Minister Ehud Olmert for lunch and was scheduled to see Foreign Minister Tzipi Livni and Trade Minister Eli Yishai later in the day.
Yishai told Israel Radio beforehand that Olmert had instructed him to raise the Shalit issue, and said he saw a Gaza truce as "inconceivable" without the soldier's repatriation.
But Hamas looked set on insisting that Shalit be released only in exchange for hundreds of Palestinian terrorists jailed in Israel. Ahmed Youssef, advisor to Hamas leader Ismail Haniyeh, said Shalit's fate would continue to be treated as a separate issue to the Gaza truce idea.
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