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."

The Latest from Israel-Palestine (16 March): Israel Coalition, Palestinian Reconciliation

Late Afternoon Update (5 p.m. GMT): Palestinian sources say that agreement has been reached in Cairo amongst factions on the holding of Presidential and legislative elections by January 2010.

In Israel, Benjamin Netanyahu's Likud Party and the Israel-Beitenu Party of Avigdor Lieberman have signed a coalition agreement. Lieberman would be the Foreign Minister and Israel-Beitenu would also have the ministerial portfolios of internal security, infrastructure, tourism, and integration of new immigrants.

Morning Update (10 a.m. GMT): Interesting news out of Tel Aviv. Israeli Prime Minister Ehud Olmert (pictured) has postponed for 24 hours Monday's Cabinet meeting, which was to discuss the possibility of a prisoner exchange with Hamas for kidnapped soldier Gilad Shalit.

"It should be emphasized that as of yet, there is no sign that indicates a result in any particular direction in the negotiations," the Prime Minister's Office said.

It appears that the two Israeli negotiators in Cairo, Yuval Diskin, the head of domestic intelligence service Shin Bet, and Olmert's envoy Ofer Dekel have stayed an extra day. It is also being reported that Hamas military commander Ahmad Jabari has been in Egypt since Thursday to head Hamas' delegation on the prisoner issue.

Olmert's office is still being cautious, saying, "It should be emphasized that as of yet, there is no sign that indicates a result in any particular direction in the negotiations."