Once again in the history of the Israeli-Palestinian conflict, Israel is faced with the question of whether to cross the red line in the hard war against terrorism. The political-security leadership is wondering whether the release of hundreds of Palestinian prisoners in exchange for abducted Israel Defense Forces soldier Gilad Shalit will encourage further kidnappings of Israeli soldiers and civilians.

The list of prisoners presented to Israel is extreme in its demands. It is clear that Israel will have to cross certain lines in this deal, and the question is how to bring Shalit back without undermining certain criteria of the war on terrorism. Israel has no choice but to negotiate with Hamas, even through Egyptian mediation.

The lesson of this story is that leaders should avoid arrogant declarations - that Israel will never negotiate in the case of the abduction - and avoid mistakes we made in the past to gain the release of prisoners and the corpses of kidnapped soldiers.

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The concern of the Shalit family for their son is an important element in the considerations, and there is an obligation to do the utmost to bring home any IDF soldier imprisoned by the enemy. But there are dissenting voices: families whose sons were killed during an operation to capture those terrorists who are about to be released, or those who lost family members to terrorist attacks. Those who are guilty are now on Hamas' list to be released.

Hamas has a twin interest in the release of the prisoners: shocking Israeli public opinion and bolstering its position among the Palestinians. Israel's surrender to Hamas on the matter of the prisoners' list will seriously undermine its deterrent in the war against terrorism and will bolster terrorist groups. The lesson to terrorists is that acts against Israel are risky, but they stand a chance of avoiding punishment a few years later. This is the kind of message that the 19 suspects in the plot to detonate a car bomb in Tel Aviv over Passover may receive. The driver of the vehicle is a Palestinian with an Israeli identity card. Israel should not agree to the inclusion of Israeli Arabs, imprisoned for terror, on the list, unless they are willing to relinquish their citizenship and leave the country.

There is no way to avoid negotiating with Hamas for the release of Shalit, despite the continuing war. The members of the National Security Council are right in their claim that the current deal needs to be part of a broader effort. For example, not only exchange of Shalit for these prisoners but also the commitment of the Hamas government to impose the cease-fire on all the Palestinian groups. A release of prisoners in stages will ensure that this commitment is upheld.