The German mediator brokering a deal with Hamas to free Gilad Shalit has presented Israel’s latest proposal to the group in Gaza.

Gerhard Conrad held a meeting with senior Hamas leader Mahmoud Zahar, who is expected to reject the latest offer from Israel.

Hamas wants 1,200 Palestinian prisoners in return for Shalit, 23, who was captured in 2006.

Israel has been reluctant to release some of those on the list, including those responsible for deadly terror attacks. It has agreed to 980 releases.

Hamas deputy chairman Moussa Abu Marzouk said that the Israelis had withdrawn several key promises from their new proposal to free the soldier.

Mr Marzouk said: “Every time we get close to an agreement, the Israelis back out at the last minute. We're sticking to our demands out of national common sense.

“We're determined to come to a reasonable prisoner swap which will bring about the release of our imprisoned heroes. We won't give up on these demands, that’s our commitment.”

He added: "This German mediator isn't the first, and he won't be the last.”