Prime Minister Ehud Olmert on Thursday shrugged off comments by Hamas' Damascus-based political chief Khaled Meshal, in which he acknowledged the existence of Israel.

Meshal, whose Hamas movement leads the Palestinian government, told Reuters in an interview on Wednesday that Israel is a "matter of fact," apparently softening a previous refusal to accept that Israel's existence.

Olmert, asked by reporters accompanying him on a visit to China about Meshal's acceptance of Israel as a state that will endure, said: "Does that mean we weren't until now?"

"Should I be expected to check what he said? Should I be expected to read what he said?" Olmert added, shrugging as he toured Beijing's Forbidden City.

Hamas for its part denied Wednesday that Meshal told Reuters in an interview that his group would consider recognizing Israel once a Palestinian state is established. (Click here for the full interview)

One hour after the Reuters interview was published, the Hamas government spokesman Ghazi Hamad told Haaretz that Meshal said, "Israel exists - and that's a fact."

However, Hamad maintained that Meshal did not say anything about recognizing Israel. "There was no change in our stance that Hamas does not recognize Israel," he said.

Salah Bardawil, head of Hamas's parliamentary faction, told Haaretz that after checking with Meshal, it seems to be that his words were twisted and distorted.

"He didn't speak about any recognition of Israel, only a cease-fire with Israel," Bardawil said.

Israel is a "reality" and "there will remain a state called Israel, this is a matter of fact," Meshal, who is considered Hamas' main power broker, told Reuters.

The problem was not Israel's existence but the failure to establish a state for Palestinians, said Meshal, whose party leads the Palestinian government.

Formal recognition of Israel could only be considered by Hamas once such a Palestinian state is established, Reuters quoted Meshal as saying.

Senior Hamas officials have already made similar statements over the past year, saying Israel's existence is an undeniable reality, but this is the first time that such statements are emanating from the group's Syria-based leadership.

This is also the first time that a Hamas official has raised the possibility of full and official recognition of Israel in the future. To date the group's official position, which Meshal had repeatedly reiterated, was that Hamas will never recognize Israel.

"The distant future will have its own circumstances and positions could be determined then," he said. Past concessions to Israel by Palestinian negotiators went unrewarded, he argued, and his Islamist group would drive hard bargains over key issues such as recognition.

"For Israel to suck us into bargains in stages and in packages - this road constitutes an attempt to weaken the Palestinian position."

Israel and Western governments have put financial sanctions on the Hamas-led Palestinian government for refusing to recognize Israel, renounce violence and accept past peace accords. Egypt has also been stepping up pressure on Hamas to recognize Israel.

Meshal said Hamas would defy the Western conditions and refuse to consider granting formal recognition to Israel until its demand for a Palestinian state was met.

Hamas wants a Palestinian state that includes Gaza, the West Bank and East Jerusalem and the right of Palestinian refugees to return to homes lost in the 1967 Six Day War and before, Meshal said.

"As a Palestinian today I speak of a Palestinian and Arab demand for a state on 1967 borders. It is true that in reality there will be an entity or state called Israel on the rest of Palestinian land," said Meshal.

"This is a reality but I won't deal with it in terms of recognizing or admitting it," he added.

Asked about Meshal's comments, Foreign Ministry spokesman Mark Regev responded that Hamas had said in the past it wanted to wipe Israel from the map and there was no indication it had changed its position.

Meshal also blamed "Israeli intransigence" for the delay in a deal to release captured Israel Defense Forces soldier Gilad Shalit in exchange for thousands of Palestinian prisoners. Shalit's father Noam said Wednesday he would be willing to turn himself over to his son's captors if they release the captured soldier.

"The message must reach Gilad Shalit's family that Israel bears the responsibility for prolonging his captivity," Meshal said. "There had been real progress and Egypt is making a positive effort but regrettably the talks stumbled in the last few days because of Israeli intransigence," Meshal said.

"We are keen to release Shalit as soon as possible, but only in return for Israel releasing a number of our men, women, children and Palestinian leaders in its jails," he said.

Meshal said Shalit was being given "good treatment."

"The international community is concerned for one Israeli soldier called Gilad Shalit and has memorized his name," Meshal said. "It must show concern for the suffering of 11,000 Palestinian prisoners who include 400 children and 120 women."

ANALYSIS: Meshal declaration basic shift in Hamas position