The Latest from Israel-Palestine (17 March): Hopes of Prisoner Swap Recede

Evening Update (7 p.m. GMT): In a pointed indication that the talks over a prisoner swap are near break-down, Israel has played its most threatening card, short of military action. After Tuesday's Cabinet meeting, a spokesman emphasised, ""The crossings... are operating at a minimum to prevent a humanitarian crisis in Gaza. And they will remain so until [kidnapped soldier] Gilad Shalit (pictured) is released."

As the Israeli Cabinet meets on Tuesday afternoon to discuss negotiations with Hamas over an exchange of prisoners for kidnapped Israeli soldier Gilad Shalit, it appears that the chances of a deal have all but disappeared.

After the return of Israeli negotiators Yuval Diskin and Ofer Dekel from Cairo, Prime Minister Ehud Olmert's office put out the pessimistic statement, "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."