The Israeli soldiers were not located inside the Gaza Strip, the country's army spokesman said.
 
Talks agenda
 
On the political front, aides to Mahmoud Abbas, the Palestinian president, said that substantive talks over borders and the fate of Jerusalem and Palestinian refugees would not begin until Israel committed to halting all settlement activity.
 
Israeli officials said that they would consider ways to relax criteria for releasing Palestinian prisoners, part of efforts to secure a swap deal with Hamas for Gilad Shalit, the captured Israeli soldier.
 
The road map also calls on the Palestinians to rein in fighters, an obligation that Israel says must be fulfilled in the occupied West Bank and Hamas-controlled Gaza Strip before a Palestinian state can be established.
 
Hamas seized control of Gaza in June after routing Abbas's secular Fatah forces.
 
Settlement dispute
 
The first round of peace talks following a US-sponsored conference in Annapolis, Maryland, opened in discord on December 12.
 
Abbas demanded Israel drop plans to build some 300 new homes in an area near Jerusalem known to Israelis as Har Homa and to Palestinians as Abu Ghneim.
 
Settlements - facts and figures

Between 1967 and 1977 Israel constructed 30 settlements with more than 5,000 settlers, mostly in West Bank

Israel pulled out of all 17 Gaza settlements and four West Bank settlements in August 2005

About 440,000 settlers remain in the West Bank and East Jerusalem

Settlements cost Israeli government about $556m each year

Israel's Separation Wall around occupied West Bank will stretch for more than 700km, looping around most settlements

Based on the current plan, 8.6 per cent of the West Bank falls on the Israeli side of the wall

Wall sections around the Ariel and Ma'ale Adumin settlements most contentious as they cut deep into the West Bank, dividing it from East Jerusalem

Source: Peace Now

Now, on the eve of the second round of negotiations, Israel's construction ministry has unveiled a proposal to build 740 new homes next year on occupied land near Jerusalem.
 
Of them, 500 would be in Har Homa and 240 in the Maale Adumim settlement.
 
Abbas said he could not understand why Israel was "carrying out frenzied settlement activity during final status negotiations".
 
Mark Regev, spokesman for Ehud Olmert, the Israeli prime minister, said Israel would meet its obligations.
 
He said Israel would not allow "outward growth" of existing settlements by preventing new settlements from being built, and by not confiscating any more Palestinian land.
 
But Israel will allow construction within built-up areas of existing settlements, he said.
 
Israel wants to keep Maale Adumim and other large settlement blocs in any peace deal.
 
However, Salam Fayyad, the Palestinian prime minister, said Israel's settlement plans were "sabotaging negotiation efforts".