Israel's outgoing government would not be able to bring back the household-known kidnapped soldier Gihad Shalit from the Hamas movement, the captive's father said on Tuesday.

Caretaker Prime Minister Ehud Olmert dispatched two senior officials on Saturday night to Cairo for talks with Egyptian mediators over a possible prisoner swap with Hamas, which would secure the return of Gilad Shalit. Yet the envoys did not bring back any agreement following two days of intensive bargaining.

"The current government will apparently not be able to bring Gilad back. The prime minister has failed in this regard," said the soldier's father, Noam Shalit, outside a protest tent pitched in front of Olmert's official residence, after being briefed on the Cairo talks.

Meanwhile, in a letter to Olmert, Noam Shalit has urged the departing premier not to abandon Gilad "despite the heavy price this entails," while noting that his son was taken away shortly after Olmert became prime minister in 2006, reported local news service Ynet.

The disappointment was voiced shortly before a scheduled close-door special cabinet meeting in the afternoon, when the two envoys were expected to update ministers with details of their negotiations. As no agreement was achieved, no vote was expected at the meeting.

"It became clear during the discussions that Hamas had hardened its position, reneged on understandings that had been formulated over the past year and raised extreme demands" despite Israel's "generous proposals," said Olmert's office in a statement on Monday night, putting the blame squarely on Hamas.

In response, the Islamic group, which has purportedly held Gilad somewhere in the Gaza Strip, categorically rejected Israel's accusations, stressing that the Israeli side did not present any serious offer during the latest Egypt-mediated talks.

Israeli media speculated that both Olmert and Hamas desire to solve the cause celebre, as the former might use the success to burnish his legacy and the latter would find Olmert's successor, hawkish Likud leader Benjamin Netanyahu, to be more difficult to deal with.

Furthermore, an Israel-Hamas prisoner exchange, which might seethe Jewish state free hundreds of Palestinian prisoners in return for Shalit's release, would pave the way for Israel to open its border with Gaza and for the two sides to sign a long-term truce deal.

Such a scenario would in turn facilitate Gaza reconstruction following Israel's massive punishing operation in December and January, which would relieve the pressure on Israel from the international community out of humanitarian concerns and give Hamas some bragging rights for ending Israel's economic blockade.

Hamas on Tuesday expressed hope that Olmert would continue negotiations on the subject. Yet the departing Israeli leader said earlier that the two envoys' trip to Egypt was the last chance for an agreement before he leaves office.

Before the special cabinet meeting, Industry, Trade and Labor Minister Eli Yishai, whose Shas party is poised to join the next government led by Netanyahu, echoed Noam in saying that the current government appeared not able to secure Gilad's release.

"It seems that this government won't succeed in resolving the Shalit saga. But the next government will be committed with the same intensity to bringing Gilad back. That is its duty, despite the difficulties anticipated," local daily The Jerusalem Post quoted him saying.

However, some others still hold hope that a breakthrough might occur soon. "I hope that Hamas will understand the opportunity it has and will not toughen its stance further, so that we can reach a positive solution," Tourism Minister Ruhama Avraham-Balila was quoted as saying.