GAZA CITY/RAMALLAH, 12 April 2007 — Hamas charged yesterday that Israel was blocking a prisoner exchange deal for a soldier held by Gaza-based fighters, as the Jewish state said there were “limits” to negotiations. “Israel is the main obstacle at reaching an accord on an exchange of prisoners,” a spokesman for Palestinian Prime Minister Ismail Haniyeh of Hamas, Ghazi Hamad, told reporters.

“With the position that it has adopted, Israel is confirming that it does not want (Gilad) Shalit freed and does not want an accord,” he said, referring to an Israeli soldier seized by fighters, including the armed wing of Hamas, last June. Hamad added, however, that further “discussions” could produce an agreement.

Israel has expressed “disappointment and reservations” with the prisoners that Palestinians want freed in return for Shalit, following Prime Minister Ehud Olmert’s first meeting with security chiefs to discuss the list, which it received through Egyptian mediators. Defense Minister Amir Peretz warned yesterday that “in all negotiations there are limits.”

“But the government will do everything ... will use all the means at its disposition” to ensure the safe return of Shalit and two other servicemen, held by Lebanon’s Hezbollah, he told public radio. Olmert will convene the security Cabinet on Sunday to set Israel’s criteria for clearing prisoners for release, although Israel has said it would not free prisoners “with blood on their hands” — those responsible for killing Israelis.

But Hamad said “there is no excuse to refuse the names presented to Israel.” “In the past Israel has carried out prisoner exchanges with Hezbollah members who had killed Israelis,” he said, referring to the Shiite militia Hezbollah with which the Jewish state fought a 34-day war last summer.

Earlier yesterday, an Israeli minister said charismatic Palestinian leader Marwan Barghouthi was not on the list of some 450 names handed over to Israel, contrary to reports earlier from sources close to the Palestinian government. “Marwan Barghouthi name does not appear on the list” which Egyptian mediators handed to Israel last week, Housing Minister and member of the powerful security cabinet Meir Sheetrit told public radio.

The Hamas also criticized the US decision to transfer money to support forces loyal to President Mahmoud Abbas. Yehya Mousa, a senior Hamas lawmaker said yesterday that,” the money does not contribute to the interests of the Palestinians people and aims only to harm national unity.”

Moussa said the money was “dirty” because it will bypass the government and go directly to support forces loyal to Abbas. The US administration authorized on Tuesday $60 million in aid has been approved by the Congress to bolster forces loyal to Abbas.

“The US administration has never been with the Palestinian people’s interests but they aligned to the Israeli agenda,” Hamas movement said in a statement sent to the press yesterday. The statement added that Palestinian Ministry of Finance was the sole address that the money aid should go.