Palestinian militant factions who captured an Israeli soldier demanded on Saturday that Israel free 1,000 prisoners from its jails and end an assault on Gaza launched to win the soldier's release.

Smoke rises from the Palestinian Interior Ministry building in Gaza June 30, 2006. [Reuters]

A statement from the groups - the second since Corporal Gilad Shalit was captured in a raid across Gaza's frontier on Sunday - appeared to cast doubt on the hopes of mediators that diplomacy could soon get him free.

Israel has said repeatedly that it will not consider releasing prisoners in exchange for the 19-year-old tank gunner. Israeli officials were not available for comment.

"We are declaring to the public our just and humanitarian demands," said the statement faxed to news agencies by the armed wing of the governing Hamas Islamist group, the Popular Resistance Committees and Army of Islam.

It repeated an earlier call to free women prisoners and minors in exchange for information on Shalit -- the group has not said if he is dead or alive - but also demanded the release of 1,000 "Palestinian, Arab and Muslim prisoners."

It said these would have to include all Palestinian faction leaders as well as humanitarian cases.

"Military Statement Number Two" did not specify that this would be in exchange for Shalit's release. Abu Ubaida, a spokesman for the Hamas armed wing, said that was what it meant.

The crisis has sent Israeli-Palestinian relations to new lows and piled more pressure on the Hamas Islamist government, already straining under a U.S.-led aid embargo to get it to renounce violence and drop its vow to destroy Israel.

Appearing to cast doubt on prospects for mediation, the statement insisted that Israel "end all aggression" in the occupied West Bank as well its operations in Gaza.

"The escalation and arrogance mean the enemy will be responsible for the bad consequences," it said. There was no specific threat to Shalit.

Israeli aircraft fired missiles at training camps for militants early on Saturday, but the Jewish state kept on hold a threatened ground assault into northern Gaza. Diplomats said that was partly to give Egyptian-led mediation a chance.

Prime Minister Ismail Haniyeh of Hamas demanded an end to the Israeli offensive on Friday and said it was complicating efforts to end the standoff.

He said he was working to end the crisis together with the Egyptians and President Mahmoud Abbas, a moderate.

Diplomats said Egypt was trying to get Syria to lean on Damascus-based Hamas leaders with greater sway over the armed wing than Haniyeh.

Israel says it is not playing any role in the mediation and has rejected the possibility of freeing some of its thousands of Palestinian prisoners in an exchange similar to past deals it has made with Lebanese and Palestinian guerrillas.

Israeli tanks entered the southern Gaza Strip this week in the biggest push into the territory since Israel pulled out troops and settlers last year after 38 years of occupation.

Air strikes have targeted roads, bridges, areas used to fire rockets and the Interior Ministry offices. Two militants have been killed. The army said they were members of squads trying to fire rockets into Israel.

The Palestinians urged the U.N. Security Council on Friday to press Israel to quickly end its offensive, but the United States said Syria and Iran must first end their role as "state sponsors of terror" and condemn Hamas militants.