Israel won't pay 'any price'
Gaza - Israel said on Tuesday it was not prepared to agree to all of Hamas's demands in a German-mediated deal to exchange a captive Israeli soldier for hundreds of Palestinian prisoners.
A Hamas official said a German mediator had arrived in the Gaza Strip to convey Israel's latest response, but the Islamist group said later he had postponed his visit.
An official close to the negotiations said the mediator would travel to the territory on Wednesday because Israel wanted to modify its reply and asked him to postpone his meetings.
Israeli Defence Minister Ehud Barak said soldier Gilad Shalit's return home after more than three years in captivity in the Gaza Strip was Israel's priority. However, he told the media Israel was not prepared to pay "any price" for Shalit's freedom.
Under a proposed deal, about 1 000 of the 11 000 Palestinians held in Israeli jails would be released.
Officials familiar with the talks said Israel was intent on barring Palestinians convicted of killing Israelis from returning to the occupied West Bank, which is close to Israeli cities, and that they might be sent instead to the Gaza Strip or foreign countries.
Hamas had accepted that some released prisoners would be exiled but wanted them to be able to choose their destinations, the officials said.
It was unclear whether Israel had dropped its opposition to freeing 20 senior militants whose release Hamas has demanded. Israel holds them responsible for the deaths of dozens of its citizens.
Prime Minister Benjamin Netanyahu discussed a swap with senior ministers, including Barak, on Monday, while Shalit's family, joined by demonstrators seeking his release, held a vigil outside the Israeli leader's office.
Shalit, now 23, has been held captive in the Gaza Strip since 2006. He was seized by militants who tunnelled into Israel from the territory.
Netanyahu's office issued a terse statement after Monday's late-night cabinet talks, saying the Israeli leader had told his negotiating team to continue efforts to free Shalit.
For Netanyahu, a right-winger whose tough dealing with militants has been a centrepiece of his political career, the release of prisoners responsible for the deaths of Israelis poses a particular dilemma.
An exchange in the coming days would coincide with the first anniversary of an offensive launched by Israel in the Gaza Strip on December 27 last year. At least 1 400 Palestinians and 13 Israelis were killed in three weeks of conflict.
The United Nations and Western powers hope a swap will open the way to a relaxation of Israel's blockade of Gaza, where 1.5 million Palestinians are dependent on food aid and smuggled goods.
Netanyahu has given no indication he would ease the restrictions after a deal with Hamas, which has spurned Western demands to recognise Israel and renounce violence.