Israel is neither broken nor defeated, and has red lines that it simply will not cross even to free a kidnapped soldier, Prime Minister Ehud Olmert told the nation Tuesday evening, explaining why last-minute efforts to broker a deal for the release of St.-Sgt. Gilad Schalit had apparently run aground. "I wish to say, on behalf of the State of Israel and its government - we do have red lines," Olmert said in a brief statement after a three-hour cabinet meeting on recent developments in the effort to free Schalit. "We will not cross them." "We are not a broken people," Olmert continued. "We are not a defeated nation. A people who desire life, one surrounded by hostile countries, threatened by murderous terrorist organizations - cannot, is not willing, nor will it agree to surrender to every dictate made." Ofer Dekel, Olmert's emissary on the prisoner issue, who has been working on the Schalit matter for years, and Shin Bet (Israel Security Agency) head Yuval Diskin briefed the cabinet on their recent negotiations in Cairo and said that not only was Hamas unwilling to show any flexibility in its demands, but the organization had actually backtracked on conditions that had already been agreed upon. According to government officials, Dekel and Diskin approved some 325 names out of a list of 450 that Hamas had demanded. When Israel refused to consider the others, Hamas refused to submit other names for consideration. Israel would "not agree to release more prisoners from the Hamas list beyond the hundreds of names that we agreed to and announced to them," the prime minister said in his statement. Olmert, whose time in office is nearing its end, said, "As long as I stand at its head, the government of Israel will not agree to any of the conditions or dictates of Hamas as they were presented to the negotiating team. Israel presented the other side with generous, far-reaching and unprecedented offers that were meant to lead to Gilad's release. "I approved these offers, the practical meaning of which was the release of many hundreds of terrorists, including murderers of Israeli citizens, for the possibility of returning Gilad. These offers were rejected. Others will not be delivered to the Hamas." It is widely assumed that Olmert's successor, Prime Minister-designate Binyamin Netanyahu, will be less generous than Olmert on the matter, although he has said nothing publicly on the issue. In a shift of tactics, the Prime Minister's Office - following the cabinet meeting - published for the first time the names of some of the prisoners Israel was ready to release, as long as they would be expelled either abroad or to the Gaza Strip, as well as the names of 10 terrorists Israel was unwilling to let go. Among those Israel refused to release were Abdullah Barghouti, given 67 life sentences for his role in a string of terror attacks, including at the Sbarro restaurant and Moment CafÃ© in Jerusalem, that killed 66 Israelis and wounded 500 others; Mohand Sarim, one of the planners of the Park Hotel bombing in Netanya, which killed 29 Israelis and wounded 64 others on Pessah 2002; and Ra'ad Hutari, convicted of recruiting a number of suicide bombers, including the one who perpetrated the 2001 attack at the Dolphinarium in Tel Aviv, which killed 22 people and wounded 83 others. At the same time, Israel agreed to release hundreds of terrorists "with blood on their hands," including Nassar Nazal, a senior Hamas operative in Kalkilya who dispatched the suicide bomber who carried out an attack in October 2002 on the Bar-Ilan Bridge, killing one person and wounding 20. A government source said the criteria for who would be released, even though they had "blood on their hands," and whom Israel refused to release even if they were deported, was based on determinations by security officials regarding who would be more likely to harm Israel in the future, even from abroad. "The determination was based on who was a greater risk to come back and haunt us in the future," the source said. According to government sources, in addition to the disagreement over which prisoners would be released, there was still disagreement with Hamas over Israel's demand that they not return to the West Bank, but either be deported or sent to the Gaza Strip. A statement released by the Prime Minister's Office after the cabinet meeting said that according to the assessments heard in the meeting by the country's top security officials, "if Israel had released all of the murderers that Hamas was demanding, this would have caused severe damage to national security, including regarding the rehabilitation of strategic terrorist infrastructures and the return of senior 'terrorist engineers' who had planned and put into operation the most murderous terror attacks that Israel has ever known. This would have also dealt a mortal blow to pragmatic elements in the region, whereas the extremists would have been significantly strengthened." In addition to Diskin and Dekel, the cabinet ministers also heard from Chief of General Staff Lt.-Gen Gabi Ashkenazi and OC Military Intelligence Maj.-Gen. Amos Yadlin. While the government did not vote on any concrete proposal at the meeting, it did approve the establishment of a ministerial committee, headed by Justice Minister Daniel Friedmann, to propose additional sanctions that Israel could use to "soften" Hamas's demands. Among the proposals that the committee is expected to discuss, and which are to be brought to Sunday's cabinet meeting, measures to make the conditions in Israeli jails for Hamas prisoners more difficult, including restricting visitation rights, phone and telephone access, and newspaper and television privileges, and perhaps depriving them of electricity at night. The rationale behind this would be to make the conditions facing the Hamas prisoners somehow similar to Schalit's. "Hamas made demands that no Israeli government would have been able to accept," Friedmann told reporters following the cabinet meeting. "We all share in the Schalit family's pain," he said. "The prime minister was ready to make many concessions, but there are red lines that Israel can not cross." He likened Hamas to Hitler and said that in the years prior to World War II, democracies had mistakenly made concessions to the Nazis without understanding how dangerous that was until they were on their knees. Olmert met with Schalit's parents immediately after the cabinet meeting. "The prime minister briefed us on everything that has taken place up until now," Noam Schalit said. "We received a number of clarifications and explanations. The prime minister will continue [negotiations], and is not throwing up his hands." Olmert, in his statement on Tuesday evening, attributed the lengths that Israel had gone to secure Schalit's return to the "mutual responsibility" that united the nation, and to "the recognition that whoever saves one soul in Israel, it is as if he has saved an entire world. This guided our actions in our attempt to bring Gilad back home, so far unsuccessfully. But we will not stop making efforts, and we will talk to whoever we can." Hamas officials, meanwhile, claimed on Tuesday that while Israel had agreed to release 450 Palestinian prisoners, it had insisted on determining the identity of nearly half of them. They said that the Hamas list that had been presented to Israel through the Egyptians in the past few days consisted of 450 prisoners. Israel had approved the release of only 250 of them, they added. Osama Hamdan, Hamas's representative in Lebanon, said his movement was prepared to continue negotiations with Israel over the release of Schalit. Israel's "negative attitude" was behind the current stalemate, he said. "If Israel is serious, then it must change its negative attitude and accept all of Hamas's conditions," Hamdan added. "Otherwise, there's no point in resuming the negotiations." According to Hamas officials, the main reason behind the collapse of the talks was Israel's demand that dozens of freed prisoners be deported to the Gaza Strip and Arab countries. "Israel agreed to release 250 prisoners whose names appeared on our list," said a Hamas representative in the Gaza Strip. "But the Israelis insisted that they, and not Hamas, choose the remaining 200 prisoners slated for release." They said Israel had also insisted on maintaining the right to decide which prisoners would be deported and which would be allowed to be reunited with their families in the West Bank. Ali Barakeh, a prominent Hamas political official, rejected Olmert's allegation that Hamas had toughened its stance and backtracked on earlier understandings with Israel. "Hamas did not make any new conditions," Barakeh said. "Hamas's position remains clear and fixed and hasn't changed." Barakeh said that Hamas was not afraid of dealing with a new Netanyahu government. Hamas legislator and negotiator Salah Bardaweel also dismissed Olmert's talk about a change in Hamas's policy. "It's really strange and outrageous to hear the Israeli government talk about Hamas toughening its position," he said. "Hamas is totally opposed to the deportation of prisoners." He said that Hamas was demanding the release of less than 10 percent of the Palestinian prisoners being held in Israeli jails. "These are heroes who sacrificed their lives to defend Palestine," Bardaweel said. "They have spent the best years of their lives behind bars." Tovah Lazaroff contributed to this report.