JERUSALEM – With troops poised to invade Gaza, Prime Minister Olmert yesterday ruled out bargaining with the captors of an Israeli soldier and promised a “broad and ongoing” military offensive.

But large-scale army action appeared unlikely. Officials said they were pursuing a diplomatic solution and conceded that a broad attack would threaten the life of the 19-year-old hostage captured Sunday.

After more than 24 hours of silence, the terrorists claiming to hold Corporal Gilad Shalit issued their first demands yesterday. The groups, linked to the Hamas-led Palestinian Arab government, said Israel should release all imprisoned Palestinian Arab women and children under 18 in return for information about Corporal Shalit.

Mr. Olmert rejected the demand. Addressing Jewish leaders in Jerusalem, he charged that the Palestinian Arab attack on an army post at a Gaza crossing and the abduction of the soldier were part of a “murderous, hateful, fanatical Islamic extremist desire to destroy the state of Israel.”

“This is not a matter of negotiations, this is not a matter of bargaining,” he declared. “Release of prisoners is absolutely not on the agenda of the Israeli government.”

Corporal Shalit was seized at a military post near the Gaza border by terrorists who infiltrated Israel through a tunnel. The attack was the first successful infiltration by terrorists since Israel withdrew from Gaza in September and immediately threatened to plunge the region into a major flare-up of violence.

Speaking earlier in Jerusalem, Mr. Olmert said he held the entire Palestinian Arab leadership responsible for Corporal Shalit’s safety and warned that his patience was wearing thin.

“I gave the orders to our military commanders to prepare the army for a broad and ongoing military operation to strike the terrorist leaders and all those involved,” he said. “There will be immunity for no one.”

Military officials said elite brigades and armored forces, backed by tanks, were sent to the frontier, where thousands of soldiers already are deployed.

With Israeli intelligence showing that Corporal Shalit was not seriously wounded, defense officials said there were no immediate plans for a massive ground incursion. Although Israel frequently carries out air raids in Gaza, ground troops have entered the area only three times – all briefly – since last year’s pullout.

However, the officials said a limited operation could begin in the coming days. Such operations could include a rescue attempt or a limited mission meant to pressure Hamas to free the soldier. The officials spoke on condition of anonymity because they were not authorized to speak to the press.

The Palestinian Arab leader, Mahmoud Abbas, a moderate who has clashed repeatedly with Hamas, was working with Egyptian mediators and Arab and Western leaders to locate the soldier.

A Hamas spokesman, Ghazi Hamad, said he had information Corporal Shalit was alive and urged the captors to keep him safe.

“I think we are interested in avoiding any confrontation or bloodshed,” he told the Associated Press.

The crisis exposed divisions within Hamas’s ranks. The group maintains separate political and military wings, and political leaders based in Syria are more extreme than many leaders in the West Bank and Gaza.

In a closed briefing to lawmakers, a top Israeli intelligence official, Brigadier General Yossi Beidatz, said Hamas’s leaders were divided about what to do with the soldier, participants said. He said the more moderate elements, including the Hamas prime minister, Ismail Haniyeh, consider the soldier a “hot potato” they should get rid of quickly.

Mr. Hamad said talk of a split in Hamas was “a big lie.” However,he said the political leadership in Gaza, including Mr. Haniyeh, was not warned of the assault plans beforehand.

The statement demanding the inmates’ release – about 500 people in all – was signed by Hamas’s military wing and two offshoots of the small Popular Resistance Committees, which has strong links to Hamas. It offered information about Corporal Shalit but no guarantees of his safe return.

A Popular Resistance Committees spokesman, Abu Mujahid, confirmed the authenticity of the statement from the Saladdin Brigade, the Army of Islam and Hamas’s military wing.

Palestinian Arab terrorists previously have tried to use captured soldiers to win prisoners’ releases, though Israel rarely has caved in. Israel now holds an estimated 8,000 Palestinian Arabs, many of them Hamas terrorists.

In an interview with AP Television News, a masked member of the Army of Islam said the group was formed a year ago, and Sunday’s abduction was its first operation.

He said the attack was retribution for Israel’s assassination of two Popular Resistance Committees leaders and a beach explosion that killed eight civilians.The masked man read verses from the Koran and was flanked by two M-16 automatic weapons.

Abu Mujahid said the operation was planned by Jamal Abu Samhadana, who was killed June 8 in an Israeli airstrike shortly after accepting a senior security position with the Hamas government.

Corporal Shalit was the first Israeli soldier captured by Palestinian Arab terrorists in 12 years,and the fate of the quiet, bespectacled teen gripped the country. Large pictures of Corporal Shalit’s face appeared on the front pages of local newspapers.