Palestinian militants issue Israel an ultimatum

Palestinian militants holding an Israeli soldier captive issued an ultimatum yesterday for Israel to free prisoners or face the consequences as the army kept up its military assault on the Gaza Strip.

The deadline, set for today, was immediately rejected by Israel, which had sent troops and tanks into northern Gaza after a sixth straight night of air attacks launched in a bid to pressure the Palestinians into giving up the serviceman.

"Faced with the Zionist enemy's persistence in taking military measures and aggressions, we give it a delay expiring Tuesday, July 4 at 6am," said a statement from the three groups that seized the conscript in an attack on an army post eight days ago.

"If the enemy does not meet the demands we laid out in our previous statement ... we will consider the matter closed and the enemy will be responsible for all results," said the statement from the Popular Resistance Committees, the armed wing of the ruling Hamas movement and the Army of Islam.

Israel, which has massed a force of 5,000 troops on the Gaza border, has so far rejected demands by militants for the release of Palestinian prisoners in its jails, with officials warning that the crisis could drag on for months.

"We will not give in to any blackmailing or to any ultimatum put forth by any terror organization, and in this specific case, the Hamas," army chief Dan Halutz told reporters after meeting the parents of 19-year-old corporal Gilad Shalit.

On the ground, Israeli troops shot dead a Palestinian militant from the armed wing of Hamas as forces rolled into the Beit Hanun area of northern Gaza.

The latest salvos in the escalating Middle East crisis followed threats by the armed wing of Hamas -- which is boycotted as terrorists by Israel and the West -- that it would strike civilians in Israel if the Gaza offensive was not halted.

Israel has launched its biggest military operation in a year over the abduction of Shalit in a militant attack on June 25, warning it would use all its military might to secure his release.