Israel has rejected an ultimatum by three Palestinian militias thought to be holding an Israeli soldier in Gaza.
As the assault there intensified, Prime Minister Ehud Olmert said his government would not bow to what he called extortion.
The militants gave Israel until 5am on Tuesday to release about 1,000 prisoners or face unspecified consequences.
Tank gunner Gilad Shalit, 19, was captured in a cross-border raid last week. Two other soldiers and two attackers died at the same time.
In a statement, the three groups – one the armed wing of Hamas – said that if Israel does not meet their demands they will consider the soldier’s case to be closed and Israel would have to suffer the consequences.