Israeli Prime Minister Ehud Olmert vowed on Sunday never to give in to terror, Jerusalem Post newspaper reported.

Addressing the cabinet, Olmert said "giving in to terror today means more blackmail in the future."

Olmert told the cabinet that he had ordered the Israeli army to take military action against anyone responsible for "terror attacks."

Egypt threatened on Sunday morning to stop its efforts to negotiate the release of the kidnapped Israeli soldier Gilad Shalit if its proposal were not accepted in the next few hours, in which Shalit would be released on condition that Israel releases Palestinian security prisoners and cease its military activity in the Gaza Strip.

However, Israel has rejected demand to free Palestinian prisoners in exchange for Shalit's release.

Israeli troops entered the Gaza Strip on early Wednesday in a bid to rescue the 19-year-old soldier who was captured by Palestinian militants during last Sunday's attack on an Israeli army post near Gaza border.

Source: Xinhua