Israeli Prime Minister's office said on Monday night that Hamas has increased its demands in the deal regarding the kidnapped Israeli soldier Gilad Shalit.

Hamas toughened its stance during the Egyptian-mediated negotiations for Gilad Shalit's release, went back on understandings that were agreed upon during the past year and raised extreme demands, the office said in a statement released late Monday night.

The statement came after the return of Shin Bet (Israel Security Agency) head Yuval Diskin and senior negotiator Ofer Dekel from marathon talks in Cairo over the kidnapped soldier.

The two special envoys informed Israeli Prime Minister Ehud Olmert that the negotiations for the release of abducted Israeli soldier Gilad Shalit have failed.

Hamas has demanded the release of 1,400 prisoners, including 450 who have carried out violent attacks against Israelis.

It was reported that Israel and Hamas were close to an agreement on the number of Palestinian prisoners to be released in exchange for Shalit. Israeli Channel 2 said that Israel had agreed to release 400 out of the 450 prisoners on the Hamas list. The main point of contention was Israel's demand to expel several of the prisoners to foreign countries.

On Tuesday, Israeli cabinet will be briefed on the latest developments of the matter, and a decision is expected to follow on whether to send the negotiators back to Cairo for another round of talks, or whether the gaps are too wide to bridge and the issue, therefore, should be left to the next government, according to the website of local daily Jerusalem Post.

"The government will convene to discuss the outcome of the talks, and according to the circumstances, we will decide if and how we will make a decision," Olmert said during the weekly cabinet meeting on Sunday.

More than half the ministers have expressed their support to a prisoner swap deal, including Interior Minister Meir Sheetrit, Transportation Minister Shaul Mofaz and Welfare and Social Services Minister Isaac Herzog.

Earlier on Monday, Hamas said on Monday that a possible prisoners' swap between the movement and Israel is possible within the coming a few hours.

If both Hamas and Israel accepts each other's conditions, around 1,450 Palestinian prisoners held in Israeli jails will be freed for the release of abducted Israeli corporal Gilad Shalit, it said.

But later a Hamas official who is currently in Cairo told Xinhua on telephone in condition of anonymity that so far, it hasn't been officially reported that the talks are over or a final agreement has been reached.

"All what I know right now is that Israel hasn't yet given its final response to agree on the list of prisoners' names that Hamas movement is demanding to be released for the release of Shalit," said the official.