Palestinian President Mahmoud Abbas on Saturday voiced hope for solving a crisis in Gaza over the kidnapping of an Israeli soldier by Palestinian militants despite Israel's refusal of a prisoner swap.

"It is still not a dead end," Abbas told reporters. "People are now looking for a satisfactory solution and we are hopeful that we can get it."

"Although Israel does not accept reciprocity, we may find another formula that can work," Abbas added.

In addition, the Palestinian president expressed grave worries about a possible expansion of the ongoing Israeli ground offensive in the Gaza Strip aimed to rescue the 19-year-old Gilad Shalit.

"I am worried that what is to come is going to be more difficult and we can't bear another massive aggression and occupation," he said, urging for national unity.

Earlier in the day, Palestinian militants who held the Israeli soldier hostage demanded Israel release 1,000 Arab and Muslim prisoners jailed by Israel in exchange for information on the soldier.

The kidnappers also reiterated a previous demand for Israel to release all Palestinian women and minors in Israeli prisoners.

But Israel rejected the demands.

Israeli troops crossed the border and entered the southern Gaza Strip on early Wednesday in a bid to rescue the kidnapped soldier.

It is the first major Israeli ground offensive into the Gaza Strip since Israel pulled out forces and settlers from it last summer after 38 years of occupation.

But the Israeli army has delayed entering the northern Gaza Strip in order to give more time for mediation.

A senior Palestinian lawmaker revealed earlier that Egypt had proposed a solution package to solve the Gaza crisis and that negotiations were under way.

Source: Xinhua