"If the soldier is released, we could again consider a release of prisoners as we were doing before his abduction," the interior minister, Roni Bar-On, told a local television on Monday.

 

"The prime minister, when he met [Palestinian leader Mahmoud] Abbas in Jordan, had raised a possible release of young people, women and the sick, which was not purely theoretical."

 

Bar-On was referring to a meeting between Ehud Olmert and Abbas on June 22.

 

"The entire project was totally swept aside by the attack but the soldier's return would bring this back on the agenda," said Bar-On, a member of Olmert's cabinet and Kadima party.

 

Militants linked to the Hamas-led Palestinian government captured the 19-year-old soldier in a cross-border raid on June 25.

 

Both the militants holding the soldier and Palestinian government leaders have called on Israel to release hundreds of Palestinian prisoners.

 

But Olmert on Monday ruled out a prisoner swap with the Hamas militant group to win the release of a captured Israeli soldier.

 

"Trading prisoners with a terrorist bloody organisation such as Hamas is a major mistake that will cause a lot of damage to the future of the state of Israel," he told reporters.