Article published on the 2009-03-17 Latest update 2009-03-17 12:02 TU
As Israel inches closer to the formation of a new government, talks between with the Islamic movement Hamas over a prisoner exchange appear to have collapsed. On Tuesday each side accused the other of blocking any progress.
Two Israeli envoys returned from Cairo with empty hands. The Israeli government was hoping to secure the release of Israeli soldier Gilad Shalit, who was captured by Gaza militants in June 2006.
In exchange Hamas was asking for the freeing of hundreds of Palestinian prisoners.
Israeli Prime Minister Ehud Olmert has been under increasing pressure to secure Shalit's return before his successor, hardliner Benjamin Netanyahu, takes over, but so far he has been unable to broker a deal.
"It became clear during the discussions that Hamas had hardened its position, reneged on understandings that had been formulated over the past year and raised extreme demands," Olmert's office said.
But Hamas rejected the accusation and claimed the envoys failed to make a serious offer.
Olmert is due to present details on the talks to a cabinet Tuesday. He has warned of the urgency to reach a deal before Netanyahu comes to office.
Netanyahu is expected to take a hardline approach to any negotiations. On Monday he sealed a coalition deal to form a right-wing government.
Netanyahu's party Likud reached an agreement with the Yisrael Beitenu party of Avigdor Lieberman. Lieberman, who some critics have declared a racist, is due to become the Foreign Minister under Netanyahu.