The ultimatum triggered warnings by various cabinet ministers of fierce Israeli action if Shalit were harmed.

"If, God forbid, they should hurt the soldier, our operations will be far worse," Justice Minister Haim Ramon told Channel 2. Interior Minister Roni Bar-On told Y-Net that "the kidnappers will pay a price they have not yet paid if they harm the soldier."

In Moscow, meanwhile, Foreign Minister Tzipi Livni, during a 90-minute meeting with Russian President Vladimr Putin that was dominated by this crisis, said there was a "potential for regional deterioration" unless the international community applied pressure "decisively and immediately." Similar messages, according to diplomatic officials, were passed on during the day to Washington and to various European capitals.

Livni, according to sources in her office, said that Syrian President Bashar Assad and Damascus-based Hamas leader Khaled Mashaal were the main actors behind the scenes, and needed to be the focus of international pressure.

Defense Minister Amir Peretz also continued shining the spotlight on Syria, telling a Labor faction meeting in the Knesset Monday, "We suggest that Assad, who is trying to operate with his eyes shut, open his eyes, because he is responsible. We will know how to strike those who are involved."

Shalit's captors gave Israel a 24-hour ultimatum to start releasing some 1,500 prisoners, and implied that they would kill him if he was not released. Later Monday they said they would issue another announcement when that ultimatum expired.

"We give the Zionist enemy until 6:00 tomorrow morning, Tuesday, July 4," the three groups that seized Shalit said in a statement posted on a Hamas Web site and faxed to news agencies.

If Israel doesn't comply with the demands, "we will consider the soldier's case to be closed," the statement said, an apparent reference to killing him. "And then the enemy must bear all the consequences of the future results."

Abu Obeida, a spokesman for the Hamas military wing, said Israel must at least begin freeing the women and minors.

"Israel must understand that the resistance factions are serious in this matter. They will close this case if [Israel] doesn't deal with the demands," he said, adding that there would be no compromise.

The government, however, unequivocally rejected the demands.

Following consultations with top security officials, Prime Minister Ehud Olmert issued a statement that read, "Israel will not give in to extortion by the Palestinian Authority and the Hamas government, which are led by murderous terrorist organizations. We will not conduct any negotiations on the release of prisoners. The Palestinian Authority bears full responsibility for the welfare of Gilad Shalit and for returning him safe and sound to Israel."

Israeli intelligence officials said the ultimatum was likely issued Monday morning because the kidnappers feared they would be discovered and that the IDF would launch a hostage retrieval operation.

Since Shalit's abduction last Sunday, the IDF has said he is in the Gaza Strip but has said it did not know his exact location. According to intelligence experts, the longer the standoff in Gaza continues, the easier it would be to locate the kidnappers and their hideaway.

Livni, who spoke with Olmert before meeting Putin and is in close consultation with the prime minister, spoke at length about the agony of Shalit's family, the killing last week of Eliahu Asheri and the situation in Sderot. She also met with Russian Foreign Minister Sergey Lavrov and Russia's Security Council head Igor Ivanov.

During these talks, according to her office, Livni said that Israel had shown restraint up until now, but that it would "not put up with the situation much longer."

At a press conference after meeting Lavrov, Livni, in an apparent jibe at Russia for meeting with Hamas representatives soon after they won the Palestinian Legislative Council elections in January, said, "If someone still had any doubts about the character of Hamas, the recent events have demonstrated that the government claims responsibility for terrorist attacks and strives to conduct negotiations concerning those terrorist attacks with Israel."

"Elections are not some kind of a washing machine whereby a terrorist organization can wash itself. Terror is terror," she said.

The Kremlin issued a statement saying that Putin had called Palestinian Authority President Mahmoud Abbas after the Livni meeting, and that the Russian president said Moscow "will do everything in its power to promote the swiftest possible normalization of the situation in the Palestinian territories." Lavrov, meanwhile, called for Shalit's release and an end to attacks on Israeli cities, while urging Israel to show restraint in its offensive in Gaza.

"The main thing now is to have the Israeli soldier freed. We are trying to facilitate this through every channel we have," Lavrov said at a press conference after meeting Livni.

Lavrov said it was necessary to "by all means stop the spiral of violence, which requires restraint and wisdom."

The EU, meanwhile, issued a statement Monday saying that said it was "extremely concerned about the situation which has evolved over the last days between Israel and the Palestinians and calls on all parties to abstain from any actions that are in violation of international law. It calls for the immediate and unconditional release of the kidnapped Israeli soldier."

The statement condemned Asheri's murder and called on the Palestinians to end terrorism and rocket fire on Israel. At the same time, it expressed its "particular concern about the detention of elected members of the Palestinian government and legislature. Those detained should be accorded their full legal rights."

The statement also "reminds all parties of their responsibility to protect civilian lives. Notwithstanding Israel's legitimate right of self-defense, ongoing military operations should be in accordance with international law."