"This is the price I am prepared to pay to bring Gilad home. I said yes to the deal and it is ready for immediate implementation."

Netanyahu under pressure

Israeli officials and the Hamas authorities had appeared close to reaching a German-mediated deal last December but ,with the two sides differing over whether any released prisoners should be allowed to return to the West Bank, it was never completed. 

"I am steadfast on two basic principles: the first principle is that dangerous terrorists will not return to the areas of Judea and Samaria [the West Bank] from where they can continue to harm Israel's citizens."

Netanyahu said that his second demand was that no "top terrorists" be included in any deal.

Shalit parent's began a 12-day walk from their home in northern Israel to Netanyahu's residence in Jerusalem to push for a prisoner swap to be agreed.

Thousands of Israelis were expected to join the protest march and Shalit's family said it would camp indefinitely outside the prime minister's official residence.

With public pressure on Netanyahu mounting over the issue inside Israel, Thursday's remarks were seen as some as an attempt to divert the focus back onto Hamas.

Following Netanyahu's speech, the Palestinian group said it would reject any deal that excluded certain prisoners or had them sent abroad.  

"Netanyahu is trying to delude Israeli public opinion and deceive the people. It is not a matter of numbers. It is a question of who will be released," Ayman Taha, a senior Hamas spokesman, said.