After pummeling Hamas in the Gaza Strip, Israel now hopes to push through a prisoner swap to retrieve a soldier held by the Palestinians since 2006, Israeli officials said on Thursday.

They said Israel was conditioning any lifting of its Gaza blockade on immediate progress in Egyptian efforts to free Gilad Shalit, and would be willing to relax its objections to a list of Palestinian prisoners which Hamas wants released in exchange.

The Islamists demand amnesty for 1,400 inmates, including 450 senior militants. Israel long balked over the latter group, saying their release would sap Palestinian President Mahmoud Abbas's peace strategies by bolstering rival hardliners.

But after its 22-day offensive against the Hamas administration in Gaza, Israel appears to be more flexible.

"There is a sense that we can afford to relax our criteria on the prisoner release, as any benefit to Hamas would be more than offset by the damage it sustained in Gaza," said one Israeli security official.

The official said Prime Minister Ehud Olmert wanted to clinch a deal before he is replaced in a February 10 election, though it was not clear whether the Israeli security cabinet could approve all the names on the Hamas release roster.

Addressing reporters on Thursday, Olmert said: "I believe that the military operation in Gaza created levers that can help in speeding the return of Gilad Shalit ... I will not elaborate."

Security cabinet minister Binyamin Ben-Eliezer told Israel's Army Radio that new discussions on a possible prisoner swap had not yet taken place. He added: "I am among those who would be willing to pay the highest price for Gilad's return."

EGYPTIAN MEDIATION

A top Israeli defense official, Amos Gilad, traveled to Cairo on Thursday to discuss ways of consolidating a January 18 truce which ended the Gaza offensive. Security sources said Gilad would raise Shalit in his talks with the Egyptians.

The Gaza offensive killed 1,300 Palestinians, many of them civilians, and wrecked the impoverished strip's infrastructure.

A Palestinian official familiar with the talks said the offensive had made the prospect of a swap deal more remote: "Who knows where Shalit is after what happened?" he said.

Western powers have since called for Gaza's borders with Israel and Egypt to be more open, while supporting Israel's demand that Palestinian cross-border rocket salvoes cease and that Hamas arms-smuggling from the Egyptian Sinai be choked off.

Israel stepped up the crippling Gaza embargo after Hamas, which won a 2006 Palestinian election, seized control of the territory in a brief war with Abbas's forces the following year.

The Israelis rule out restoring normal operations at Gaza's border crossings unless there is a deal on Shalit, an army conscript seized by Hamas-led gunmen in a June 2006 border raid.

"I'll tell you this here, in plain Hebrew: apart from (the passage of) humanitarian goods, there will be no crossings (opened) without Gilad Shalit," Ben-Eliezer said.