Hamas said on Tuesday that its leaders were continuing their discussions in Syria about the possibility of reaching a prisoner exchange agreement with Israel.
Sami Abu Zuhri, a Hamas spokesman in the Gaza Strip, denied a report by the Saudi-owned Al-Arabiya network that claimed that the movement's leadership has rejected the latest offer presented by a German mediator regarding the release of IDF soldier St.-Sgt. Gilad Schalit.
"Hamas is continuing to hold consultations about the latest offer," Abu Zuhri said. "It's premature to talk about any results."
According to the report, Hamas's political bureau rejected the latest offer following a 12-hour meeting in the Syrian capital.
It claimed that the decision to reject the offer was made in response to Israel's refusal to release prominent prisoners, such as Fatah's Marwan Barghouti and Ahmed Sa'da't, secretary general of the Popular Front for the Liberation of Palestine, and its insistence on deporting a large number of inmates.
A Hamas delegation from the Gaza Strip - headed by Mahmoud Zahar and Khalil Hayeh - arrived in Damascus earlier this week for consultations with the movement's leaders about the proposed prisoner swap deal.
A Hamas legislator in the Gaza Strip said that the group would announce its final position before the end of the week.
Israeli government sources said that the country had not yet received a formal Hamas reply, and that this would be conveyed by the German mediator.
At the same time, the sources said that Prime Minister Binyamin Netanyahu made clear on Sunday during a meeting with Likud ministers that there was no deal to free Schalit at the moment, and "it's not clear whether or not there will be a deal. If it comes to a vote, I'll bring it to the government, but we're not there yet, and I don't know if we ever will be."
Meanwhile, Hamas on Tuesday has threatened to kidnap another Israeli.
The warning came in an interview given by senior Hamas official in Lebanon Osama Hamdan to Hizbullah's Al-Manar television network.
Despite his threat, Hamdan emphasized that even if Hamas doesn't respond favorably to Israel's decision, negotiations would continue. He went on to confirm that Barghouti and Sa'da't were on the Hamas list.
Responding to the question of whether Hamas had rockets that could reach Tel Aviv, Hamdan said the group had "surprises" in store, with "an even greater range" than that.
Shin Bet Chief Yuval Diskin warned members of the Knesset's Foreign Affairs and Defense Committee Tuesday that the situation in the West Bank could deteriorate under the wrong mix of conditions. Diskin spoke one day after Defense Minister Ehud Barak presented a relatively optimistic picture regarding Israel's security to the same Knesset committee.
When asked about recent headlines regarding the possibility of a third intifada erupting in the coming year, Diskin said that "the chances that we will reach a situation like the one in 2000 are low," but warned that "provocations like an attack on the Temple Mount or the burning of mosques" could encourage terror.
In addition, Diskin said, "in the longer term, beyond 2010, if [Palestinian Authority Chairman Mahmoud Abbas] is replaced by another leader, like Marwan Barghouti, with a history of terror activity, and if many more Hamas prisoners are released into the West Bank, allowing them to rebuild their terror infrastructures, combined with an absence of diplomatic advances leading to the feeling that there is no exit from the current situation - that could indeed encourage a grassroots return to terror activity like we saw in the past."
Nevertheless, Diskin said that he didn't "recognize within the Palestinian public a desire to return to a wave of terror like there was in 2000."
Diskin's longer-term forecast, however, reinforced the speculation that the Shin Bet frowns upon a mass release of Hamas prisoners back to the West Bank, as is anticipated to occur within the framework of a deal for Schalit.
Diskin said that the past year saw a decrease in the volume of terror attacks, both in the Gaza Strip and in the West Bank, as well as in rocket fire against western Negev communities. In addition, he said security forces had managed to frustrate all attempts to launch suicide bombings against Israeli targets, and that the Shin Bet had delivered a blow to terror funding.
"We managed to significantly frustrate the 'charity organization' which allegedly raised money for Hamas-sponsored humanitarian activities, but was in fact used to fund terror activities," he said.
Despite the security forces' best efforts, Diskin noted, the Shin Bet "has seen intensive activity in the Gaza Strip to restore Hamas's abilities, and smuggling of weapons through the tunnels."
"Hamas's abilities today are better than before Operation Cast Lead, including their ability to smuggle weapons. They are not, however, looking for victory over Israel," he said, adding that "victory in their eyes is the number of rockets they fire and the amount of damage they cause."
"In 2010, the terror organizations will continue their efforts to strengthen and arm themselves," Diskin predicted. "They are investing particularly in an effort to smuggle into the Gaza Strip rockets with a range of over 50 km, as well as anti-tank and anti-airplane weapons."
Hamas, however, is now forced to confront another challenge in the Gaza Strip in the form of the growing popularity of terror organizations representing the "World Jihad" movement.
"Hamas is concerned by the increase in strength of World Jihad, which is popular with the younger generation in Gaza," said Diskin. He added that single cell members - and even slightly larger organized groups - are leaving more veteran Palestinian organizations and joining groups affiliated with World Jihad.
Barak, during a tour of the Gaza Division Tuesday, said that the quiet in the Gaza area is indicative of the success of Operation Cast Lead. Still, continued Barak, "the dangers have not passed."
"Hamas continues to get stronger and to prepare," he said. "Just last Friday there was an incident here in which three terrorists were killed while apparently trying to detonate a bomb along the fence."
Herb Keinon and Jerusalem Post staff contributed to this report. â€¢