Hamas militants holding an Israeli soldier said Monday they would stick to their tough demands in negotiations over his release, emboldened by the high price Israel is paying in a planned prisoner swap with Hezbollah.

The declaration could complicate Israel's efforts to bring Sgt. Gilad Schalit home after two years in captivity. Israel agreed Sunday to free Samir Kantar, a Lebanese convicted in a grisly 1979 attack, along with other prisoners and bodies of Lebanese fighters, in exchange for the bodies of two Israeli soldiers.

Israel has balked at Hamas' demands for a large-scale release of Palestinian prisoners, including many convicted in deadly attacks. But the Islamic militants said there was no reason to soften their demands in light of Israel's swap deal with Hezbollah.

In a radio interview, Hamas strongman Mahmoud Zahar said the militants would work "to release people Israel accused of having blood on their hands like Samir Kantar. We have to take advantage of this to release our prisoners."

Israeli government spokesman Mark Regev would not comment on Zahar's remarks.

Hamas-affiliated militants in the Gaza Strip captured Schalit two years ago in a cross-border raid that killed two other soldiers.

Weeks later, Hezbollah guerrillas burst across Israel's northern border, seizing two other Israeli soldiers, Ehud Goldwasser and Eldad Regev, touching off a monthlong war.

After nearly two years of German-brokered negotiations, Israel's Cabinet voted 22-3 on Sunday to trade Kantar for Goldwasser and Regev's bodies.

Before the vote, Israeli Prime Minister Ehud Olmert confirmed the two soldiers were dead. In contrast, Schalit has made an audiotape and sent a letter from captivity.

Refusing to release prisoners with "blood on their hands" — those directly involved in fatal attacks — has been a long-held Israeli principle, though it has been ignored several times in the past.

Kantar was serving multiple life terms for infiltrating northern Israel and killing three Israelis — a 28-year-old man, his 4-year-old daughter and an Israeli police officer.

Witnesses said Kantar smashed the little girl's head against a rock and crushed her skull with a rifle butt. Kantar denied killing the girl or smashing her skull. Her mother, while trying to silence the cries of her other daughter, accidentally smothered the 2-year-old.

Because of the revolting details of the case, the planned release appears to set a new standard, possibly pointing the way to freedom for other prisoners in the future.

Another prisoner serving multiple life terms, West Bank Fatah leader Marwan Barghouti, is seen by many as a natural successor to moderate Palestinian President Mahmoud Abbas if he is released. Up to now, Israel has refused to consider freeing Barghouti because of the "blood on their hands" principle.

Negotiations for release of Schalit are part of a June 19 cease-fire agreement hammered out by Egyptian mediators between Israel and Hamas. The military said Palestinian militants fired a rocket at southern Israel at dusk Monday, violating the truce. No injuries or damage were reported.

In exchange for Schalit, Hamas has demanded freedom for hundreds of Palestinian prisoners held in Israeli jails, though Barghouti is not known to be on the list.

Israel, which is holding about 10,000 Palestinians, has refused to free prisoners involved in deadly attacks. However, in recent days Israeli leaders have been talking about paying a "painful price" for the soldier, signaling a possible change.

On Monday, after the Israel-Hezbollah deal was approved, Gaza militants took a hard line.

"Schalit will not see the light until the Israelis fulfill our demands," said Abu Mujahid, a spokesman for the Popular Resistance Committees, another armed group involved in his capture. "The (Israeli) occupation's decision to release Samir Kantar will pave the way for the release of Palestinian prisoners who are serving lengthy sentences."

Critics of the Hezbollah swap have argued that trading Kantar for bodies would offer militant groups a greater incentive to capture Israeli soldiers and less reason to keep captives alive.

"I'm afraid Hamas, drawing a lesson from this deal, will harden its position," Housing Minister Zeev Biome, one of three government ministers to vote against the Hezbollah swap, told Israel Army Radio.

Defending the deal, Olmert told a meeting of his Kadima party on Monday, "I knew there would be criticism, but I did this because I wanted the boys to return home."