Fatah strongman Mohammed Dahlan said Tuesday negotiations for the release of abducted Israel Defense Forces soldier Gilad Shalit have been derailed due to internal disagreements between Hamas leaders, Israel Radio reported.

Head of the Hamas policy bureau Khaled Meshal has been working to reach an ideal exchange with Israel but has lost faith in such a possibility and is unwilling to continue negotiations, Dahlan told a Jordanian newspaper.

Hamas wants some 1,400 prisoners released from Israeli jails in return for handing over the soldier, who was captured in a cross-border raid in June 2006.

Israel has balked at a number of the names on Hamas' list - which includes some responsible for deadly terror attacks in Israel - agreeing to free around 980 prisoners.

Earlier this month, Abdullah Barghouti, a former leader of Hamas' military wing, said Prime Minister Benjamin Netanyahu was trying to sabotage the prisoner exchange to free Shalit.

"The Shalit deal will not be executed because Netanyahu doesn't want a deal," said Abdullah, who has been mentioned as one of the senior Hamas officials jailed in Israel that may be released as part of the swap.

Barghouti went on to address the Shalit family and said, "I am telling his family that his condition is good. He has food, he has a room and we are not mistreating our prisoner."

Barghouti is serving 67 life sentences after being convicted in 2003 of planning terror attacks in which 66 Israelis were murdered and hundreds hurt, including the attack on a Sbarro restaurant in Jerusalem.

He made his comments at a hearing to discuss extending his solitary confinement

In response to his remarks, Gilad Shalit's family said "Hamas and its leaders continue to behave cynically towards their people and they have still not given an answer to the Israeli proposal passed on to the German negotiator three months ago."

In January this year, a senior Hamas official warned that despite unprecedented progress in the negotiations with the German mediator, the Islamist movement was unlikely to accept Israel's latest offer for Shalit.

Hamas deputy political leader Moussa Abu Marzouk told the Egyptian daily newspaper Al-Hayat that in its latest offer, Israel had changed its stance over points to which it had already agreed.

The Dubai-based Al-Arabiya earlier this month quoted Hamas sources as saying that Israel is delaying the completion of the Shalit deal by refusing to release 50 Hamas officials it holds in its jails.

Meanwhile, activists for the release of Gilad Shalit held the Passover Seder in front of the Prime Minster's residence in Jerusalem Monday night commemorating the fourth Seder the Shalit family has celebrated without Gilad.