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The Palestinian movement Hamas vehemently rejected on Wednesday Israel's cabinet decision earlier in the day not to open its border crossings with the Gaza Strip until Hamas agrees to release abducted Israel Defense Forces soldier Gilad Shalit.

Shalit was abducted by Gaza militants in a cross-border raid in June 2006. Hamas has demanded the release of hundreds of Palestinian prisoners in exchange for the soldier's freedom.

Hamas on Wednesday accused Israel of trying to torpedo Egyptian efforts to mediate a cease-fire agreement by making "last minute demands," and that that Israel's cabinet decision is tantamount to a "knife in Egypt's back."

According to Ismail Radwan, a Hamas spokesman in the Gaza Strip, the movement is expecting an increase in Israeli aggression in Gaza in the coming days. "We won't stand around doing nothing in the face Israeli aggression," he declared.

Addressing the cabinet decision linking the lifting of the blockade on Gaza to the release of Gilad Shalit, Hamas spokesman Fawzi Barhoum said "there is no link between the two issues. Israel is being hard-headed and is piling up hindrances and erecting obstacles in the path of the Egyptian efforts," Army Radio reported.

The Palestinian United Nations observer, Riyad Mansour, told reporters at UN headquarters in New York that Israel's new demand demonstrates that "it does not want a truce now."

Earlier Wednesday, Prime Minister Ehud Olmert's security cabinet agreed after meeting for more than four hours that "it would be inconceivable" for Israel to accept an Egyptian-proposed cease-fire calling for reopening border crossings to more than limited humanitarian aid without Shalit's release," Interior Minister Meir Sheetrit told Israel Radio.

The cabinet convened an emergency session to discuss a possible prisoner exchange with Hamas which could see hundreds of Palestinian prisoners released in exchange for Shalit.

Vice Premier Haim Ramon suggested during the cabinet meeting that Israel send negotiator Ofer Dekel to Cairo for marathon talks with Hamas over the Shalit issue.

Addressing top defense official Amos Gilad, Ramon said "tell the Egyptians to invite Hamas representatives to Cairo and we will send Ofer Dekel. Each one will sit in a different room, they will negotiate, and within a week Gilad Shalit will be returning home. Tell them that only then will the border crossings open. We can't put off addressing the Gilad Shalit issue, and we must begin immediately."

Welfare Minister Isaac Herzog said to Ramon "We can't keep the border crossings closed much longer because of the international pressure."

Ramon replied "if I were you, I would go to the British foreign minister and tell him that Israel is facing a serious humanitarian crisis, and it is called Gilad Shalit, and that until he is returned home, not only will we not allow more cargo reach the residents of Gaza, we will even diminish it."

Olmert's spokesman Mark Regev said following the cabinet meeting that "the crossings are open and will remain open to humanitarian aid," but added that Israel has decided that "any further widening will be dependent first on the release of Gilad Shalit."

Regev said the security cabinet discussed the number of prisoners Israel would be willing to swap for Shalit, but he declined to disclose any of the figures or names.

"The ministers understand full well the sort of price that releasing Gilad Shalit will require and I believe they are supportive," he said, adding that Amos Gilad was expected to return to Cairo shortly to continue the talks.

Regev said prior to the meeting that the cabinet was also expected to reach a decision on the terms of a long-term truce in Gaza after Israel's 22-day offensive there last month.

The Campaign for the Release of Gilad Shalit responded to the cabinet's announcement by saying they were satisfied by the intentions, but still waiting to see the final outcome of the decision.

"The declaration released by the government cabinet meeting, was merely that - a declaration. We, as the campaign of friends supporting Gilad Shalit, are satisfied by the declaration made by the government of Israel led by Ehud Olmert, which has yet to secure the release of Gilad," they said in a statement.

"After two-and-a-half years of declarations, time has come for action. The Israeli government is obliged to take advantage of the opportunity created after Operation Cast Lead, to return Gilad Shalit to his family. We would like to emphasize that there may not be another opportunity, and there won't remain anyone to rescue."

On Tuesday, Olmert reiterated that Shalit must be freed as the top priority of any truce deal with the Hamas rulers of the Gaza Strip.

"We will negotiate his release first, and only then will we be willing to discuss things like the Gaza crossings and rebuilding the [Gaza] Strip," Olmert said Tuesday during a tour of Jerusalem. Israel and Egypt clamped a blockade on Gaza after Hamas overran the crowded coastal territory in 2007, allowing in only humanitarian supplies.

In Damascus, Hamas political leader Khaled Meshal accused Israel of adding in a new condition at the last minute in an attempt to thwart Egyptian efforts to reach a truce.

"There can be no truce unless the [Gaza] blockade is lifted and the crossings are opened. The truce issue should not be linked to the issue of prisoner Shalit," Meshal told reporters in Damascus after meeting with Arab League Secretary-General Amr Moussa.

Olmert indicated that negotiations might take weeks. His term will end soon, when a new prime minister takes over. "Even if Shalit's case cannot be resolved while I am in office, the foundations we built will facilitate his release," he said.

Hamas wants hundreds of Palestinian prisoners released in exchange for Shalit. Some prisoners were convicted of participating in or planning some of the bloodiest Palestinian terror attacks against Israel.

Israel has had a policy of not freeing prisoners directly involved in deadly attacks, but the principle has been eroded in recent years.