For the first time since the beginning of the current round of violence, the Hamas government on Saturday announced its readiness to accept a cease-fire with Israel and hold negotiations to resolve the case of kidnapped IDF soldier Cpl. Gilad Shalit. The announcement was made in the form of a five-point "initiative" that was published by the office of Palestinian Authority Prime Minster Ismail Haniyeh in Gaza City. Meanwhile, PA President Mahmoud Abbas returned to Ramallah on Saturday after spending the past two weeks in the Gaza Strip trying to resolve the crisis. Abbas's aides expressed cautious optimism regarding the possibility of reaching an agreement with Hamas over the release of Shalit. According to one aide, Egypt and other Arab parties were continuing their efforts to end the crisis despite reports about the failure of the negotiations. "We've received some encouraging signals from Hamas over the past 48 hours," he said, refusing to elaborate. Prime Minister Ehud Olmert on Saturday rejected the cease-fire offer proposed by Haniyeh. Olmert won't agree to a truce until terrorists from Hamas free Gilad Shalit, who they captured nearly two weeks ago, officials in the prime minister's office said. In response to Israel's rejection of the initiative, Ghazi Hamad, spokesman for the Hamas government, said Prime Minister Ehud Olmert was making a "mistake." Israel, he added, has tried the military solution, but to no avail. "Israel can kill, destroy and use all its force against the Palestinians, but in the end it won't be able to achieve its goals," Hamad said. "I think Israel should accept the initiative so that we could reach an appropriate formula." Sources close to Hamas described the announcement as a "serious attempt" on the part of Haniyeh to calm the situation and end the crisis that is threatening to bring down his government. Meretz Chairman MK Yosssi Beilin called on Olmert to accept the cease fire proposal. Beilin, Army Radio reported, called on Olmert to authorize Egypt to open negotiations with the Hamas-led Palestinian Authority towards a general cease-fire, within which kidnapped soldier Gilad Shalit would be released, and Kassam rocket and terror attacks would end. Israel, according to Beilin's proposal, would end its military operations in Gaza, targeted killings, and would release detained Hamas parliamentarians as well as prisoners who were scheduled to be released prior to Shalit's abduction. Several Hamas ministers and legislators in the West Bank have been rounded up by the IDF over the past two weeks, while most of their colleagues in the Gaza Strip have gone underground. "Hamas ministers have stopped showing up for work for fear of being targeted by Israel," said one source. "Almost all the ministries are run by civil servants." Another source pointed out that the Hamas-dominated Palestinian Legislative Council has also been paralyzed as a result of the Israeli crackdown. The speaker of the PLC, Aziz Dweik, has been forced to go into hiding following two failed attempts by the IDF to arrest him. "Haniyeh is very worried that the current crisis could accelerate the downfall of his government," a top PA official in Ramallah told The Jerusalem Post. "In recent days he has been trying to persuade Hamas to accept a compromise that would end the crisis." Haniyeh's proposal calls for a mutual cease-fire between Israel and the Palestinians and for the resumption of negotiations over the release of Shalit. It also calls for the release of all the Hamas representatives who were arrested by the IDF in the last two weeks and for reopening all border crossings into the Gaza Strip. In a message to the Israeli public, Hamas said over the weekend that Olmert was responsible for the failure of the talks to release Shalit and called for exerting pressure on the Israeli government to free Palestinian prisoners. "The only solution to this case is through negotiations that would preserve the life of the soldier and guarantee his safe return to his family," said a statement issued by the Hamas leadership in the Gaza Strip. It added that Shalit was being treated "well and in a humanitarian way." The statement urged Israeli journalists to "raise their voice high" in support of a prisoner exchange, warning that failure to release Palestinian prisoners would endanger the soldier's life. "There is no reason why Israel should not agree to a prisoner exchange as it did in 1985 [with the PFLP-General Command] and Hizbullah," it said. "The Israeli government will have to bear the consequences of its refusal to accept our demands for the release of all female prisoners and those under the age of 18, as well as the sick and others who have been in prison for a long time."