Israel launches Gaza strikes over captured soldier

Israel massed thousands of troops on the Gaza border as Prime Minister Ehud Olmert ruled out any negotiation with the kidnappers, holding the Hamas-led government and Palestinian president Mahmud Abbas responsible.

The raids followed a landmark agreement Tuesday between Palestinian factions on an political initiative that implicitly recognises Israel’s right to exist, a historic policy shift by Hamas which has long advocated the destruction of the Jewish state.

Israel dismissed the deal however as an "internal matter".

The situation on the ground was further complicated when an armed Palestinian group claiming to hold the soldier also threatened to kill a Jewish settler it said it had abducted in the occupied West Bank.

"Unless the aggression stops, we will kill the settler," said a representative of the Popular Resistance Committees, which claimed Sunday’s attack along with the armed wing of Hamas and another group.

Although there has been no official Israeli confirmation of the settler kidnapping, one couple reported their son missing after he failed to return home Monday.