The Egyptian President Hosni Mubarak said Thursday that Hamas has conditionally agreed to free the abducted Israeli soldier but Israel rejected the conditions set by the group for the release of the captive. 

The statements of Mubarak were published by the Egyptian newspaper Al-Ahram.

Mubarak was interviewed by the newspaper and said that talks with Hamas are positive but said that he has “warned leaders of the movement against holding on to extreme positions”.

According to Al Ahram report, Mubarak phoned Israeli Prime Minister Ehud Olmert urging him to act with restraint and warned that a large military offensive in the Gaza Strip will claim the lives of innocent civilians causing further deterioration between the two sides.
The Popular Resistance Committees, the group that abducted the Israeli soldier on Sunday, said that it will only release the soldier if Israel released all child and women detainees in Israeli prisons.

The abducted soldier, Gilad Shalit, was captured in an attack carried out by fighters who infiltrated an Israeli post near Gaza border Sunday.  Two soldiers and two fighters were killed in the attack.