They waved Israeli flags emblazoned with his likeness and demanded the government do more to secure his release. A relative read a letter from Schalit’s grandfather faulting the state for failing to bring the 24-year-old home.

“The people involved talk to us from time to time, stroke our heads, but my beloved grandchild Gilad, through no fault of his own, is still rotting away in a Hamas dungeon like a common criminal,” Zvi Schalit wrote.

Schalit, a tank crewman, was taken captive after fighters tunneled under the Israeli border, killed two soldiers at a border post and dragged him bleeding into Gaza. Hamas has allowed no one to visit him and last offered a sign of life in October 2009.

Hamas’ threat to continue holding him until its demands are met was delivered in a 39-second video uploaded Saturday to the group’s website.

Hamas wants Israel to release hundreds of Palestinian fighters. Israeli officials have balked, arguing that releasing the men would put more Israelis in danger.

In the northern Gaza town of Jabaliya, families of some of the estimated 7,500 Palestinian prisoners incarcerated in Israeli jails sat with pictures of their imprisoned sons emblazoned on birthday cakes. Number candles were planted on the cakes, signifying the 12 to 22 years the men had spent in Israeli prisons.

Earlier this week, Hamas rebuffed an appeal from the International Committee of the Red Cross to prove Schalit was still alive. Israeli Prime Minister Benjamin Netanyahu retaliated by saying Palestinian prisoners would be stripped of access to higher education and other unspecified privileges.

Palestinian prisoners have reported that Israeli corrections officials have been confiscating cell phones that had been smuggled to them, and that leading Hamas prisoners have been transferred to solitary confinement.