Gaza City: Palestinian Prime Minister Esmail Haniyeh on Tuesday appealed to the captors of an Israeli soldier snatched nine days ago to keep the conscript alive and called for negotiations to solve the crisis.

"The Palestinian Government maintains the position it adopted from the outset on the need to preserve the life of the kidnapped Israeli soldier and treat him well," the head of the Hamas-led administration said.

Israel meanwhile defied a Tuesday deadline set by Gaza militants for the release of Palestinian prisoners and warned Hamas leaders the "sky will fall on them" if the abducted soldier, Corporal Gilad Shalit, is harmed.

Haniyeh told the start of the weekly Cabinet meeting that his government, boycotted by Israel and the West, was working with "Arab and regional parties in order to find a satisfactory outcome to the matter".

The Cabinet meeting unusually kept secret until the last moment, Hamas ministers are stepping up security, fearing they may be targeted as part of an Israeli assault on their administration since the soldier was snatched.

With Israeli tanks and infantry massing along the Gaza Strip's northern border, Israeli Prime Minister Ehud Olmert said the campaign launched last week to free Corporal Gilad Shalit could turn into "a long war".

Increasing political pressure on Olmert to launch a broad ground offensive, Palestinian militants carried out their deepest rocket attack yet against Israel, hitting a school yard in the coastal city of Ashkelon, causing no injuries.

Israel has said it will hold Palestinian President Mahmoud Abbas and the Hamas-led Palestinian National Authority responsible for Shalit's safety.