Israel rejected Saturday morning to a demand by three Palestinian militant groups to free 1,000 Arab prisoners in its jails and end its offensive in Gaza.

"Prime Minister Ehud Olmert has reiterated that there will be no deals, that either (kidnapped Israeli soldier Gilad) Shalit will be released or we will act to bring about his release," Israeli Foreign Ministry spokesman Mark Regev was quoted by local daily Ha'aretz's website.

The Palestinian militants announced their terms in a statement titled "Military Statement Number Two", which did not mention to release Shalit in return.

Source: Xinhua