Israel will not accept a ceasefire in the Hamas-ruled Gaza Strip before kidnapped Israeli soldier Gilad Shalit is released, Israeli security cabinet decided unanimously on Wednesday after discussing the issue for more than four hours.

"It would be inconceivable" for Israel to accept an Egyptian-proposed ceasefire calling for reopening Gaza border crossings to more-than-limited humanitarian aid without Shalit's release, local daily Ha'aretz quoted Israeli Interior Minister Meir Sheetrit as saying.

According to Sheetrit, who made the remarks shortly after the security cabinet meeting, the security cabinet decided that Israel would not open its border crossings with Gaza until Hamas agrees to release Shalit.

The security cabinet met for a special session to discuss a possible prisoner swap with Hamas which could trade hundreds of Palestinian prisoners for Shalit, who has been in Palestinian captivity since he was abducted in a cross-border raid by Hamas-allied militants in June 2006, added Ha'aretz.

On Tuesday, Olmert signaled that the negotiation process was still far from completion, leaving open the possibility that a deal might not be finalized until he left office.