Israel imposes further punishments on Gaza after the breakdown of negotiations, reports Khaled Amayreh in occupied East Jerusalem The Israeli government has decided to impose a new "set of punishments" against the Gaza Strip following the breakdown of Egyptian-mediated negotiations with Hamas over the release of an Israeli occupation soldier held by the Islamic movement's fighters. The Israeli government, which had signaled that a prisoner swap deal with Hamas was within reach, suddenly changed its mind, accusing Hamas of "inflexibility" and "making exaggerated demands." Hamas's demands have remained unchanged ever since the Shalit affair began more than 30 months ago when Palestinian guerrillas captured the Israeli occupation soldier during a cross- border battle with the Israeli army. Outgoing Prime Minister Ehud Olmert launched a tirade against Hamas, calling the movement a "terrorist group". Olmert utterly ignored Israel's own terrorist record of killing and murdering thousands of innocent Palestinians during his reign of power. In December and January, the Israeli army carried out a huge blitz on the Gaza Strip, killing and maiming more than 5,000 people, including hundreds of children, and utterly destroying the bulk of the coastal enclave's civilian infrastructure. Similarly, the Israeli army killed and maimed thousands of innocent civilians during the 2006 onslaught on Lebanon and dropped millions of cluster bombs on the Lebanese countryside. Israel routinely calls its Arab victims "terrorists" while considering its own terror "legitimate self-defence". It also holds as many as 10,000 Palestinian prisoners, many of them political activists incarcerated without charge or trial. Trying to justify his government's refusal to release the leaders of the Palestinian Intifada from Israeli prisons, Olmert said the release of "bloody terrorists" was a red line which Israel was not ready to cross. "Israel will not give in to Hamas dictates as long as I am prime minister. We will not cease our efforts [to release Shalit from Hamas custody], but we have red lines and will not cross them. We are not a defeated nation." Israel had offered to release only 350 of the 450 political and resistance leaders imprisoned in Israel in connection with their resistance to the Israeli occupation during the last Palestinian Intifada or uprising. However, Hamas refused to compromise on the release of the remaining 100 prisoners, arguing that "as Shalit has a family, our prisoners also have families that are waiting for them to come home." Hamas spokesmen in Gaza also dismissed arguments made by Israeli leaders that some Palestinian prisoners were responsible for the death of Israelis. "Israel has murdered thousands of innocent Palestinian and Lebanese civilians with white phosphorous shells and cluster bombs. Israel has been murdering Palestinians ever since its creation. Israel itself is the world's premier murderer, liar and thief," said Mushir Al-Masri, a Hamas spokesman in Gaza. Al-Masri told reporters, "it is time Israel realises that our victims are not children of a lesser God and that Jewish blood is not more precious than Palestinian blood." Hamas's officials involved in the negotiations held Israel fully responsible for the breakdown of the talks. Osama Mazeini said Hamas was negotiating in good faith, adding that Israel wanted to "dictate on us unacceptable conditions such as which prisoner should be released." Israel also demanded that dozens of prisoners be deported to Syria, a concept Hamas described as "virulent and despicable". Syria refused, with one Syrian officials saying, "Palestinians have a country, it is called Palestine." According to Osama Hamdan, the Hamas representative in Lebanon, Israel had agreed to "the number" of prisoners to be released but not specifically to those on the Hamas list and not to how they would be released. Hamdan said Israel rejected some of the names, thinking that this could bear some fruit in view of the pressure that would be created by Olmert's imminent departure from office. He also revealed that Israel wanted Shalit to be released before it released the Palestinian prisoners, which he described as "unacceptable". Olmert likened the popular Islamic movement to the Third Reich, suggesting that the small, besieged movement posed a great threat to world democracies. The utterly spurious analogy, observers here suggest, reflected Olmert's frustration by the failure of the unrelenting harsh blockade of the Gaza Strip and Israel's bullying tactics against Hamas to force the movement to free Shalit in return for a "more modest price", allowing Israel to save face. This is what Shin Bet Chief Yuval Diskin apparently alluded to following the Israeli cabinet session Tuesday. "Had we agreed to the Hamas conditions as they insisted on during the final day of negotiations, it would have caused serious security damage to Israel." Israeli Military Intelligence Director Amos Yadlin was more forthcoming in explaining why Israel refused to free key Palestinian political and resistance leaders. "Submitting to Hamas's demands would have dealt a mortal blow to moderate elements in the Palestinian Authority and the entire Middle East, while extremists would have been greatly strengthened." Israeli sources had reported that PA leader Mahmoud Abbas had warned Israel on several occasions against releasing a large number of Palestinian prisoners at this time on the grounds that this would strengthen Hamas while adversely affecting the Western-backed PA regime. The PA dismissed the Israeli reports as "cheap disinformation". Interestingly, neither Israel nor Hamas said they would terminate talks aimed at realising a prisoner swap in the foreseeable future. However, it is obvious that Olmert and his outgoing government hope that the incoming right-wing Israeli government, headed by Likud leader Benyamin Netanyahu, will convince Hamas to back down or at least backtrack on its original demands regarding the number of prisoners it wants to see freed in exchange for Shalit. Netanyahu himself has been silent on the issue and is not expected to voice his opinion until he is sworn in as prime minister, probably by the end of next week. He had hoped that the Olmert government would free Shalit before the new government assumes power. Additional Israeli sanctions against the already tormented Gazans will include further tightening of the blockade and barring the entry into Gaza of more essential items and consumer products. This represents a direct challenge to growing American and European calls urging Israel to relax the three-year-old draconian siege.