Shin Bet chief Yuval Diskin on Sunday warned that a recent prisoner swap deal between Israel and Hezbollah could prompt Palestinian militant groups to carry out more abductions.

"The prisoner deal with Hezbollah bolsters the motivation of Palestinian organizations to kidnap soldiers and Israeli civilians," Diskin told ministers at a weekly cabinet meeting in Jerusalem.

Foreign Minister Tzipi Livni said during the meeting that a key border crossing to the Gaza Strip must remain closed pending progress on a deal for the release of abducted Israel Defense Forces soldier Gilad Shalit.

Livni told ministers that reopening the Rafah crossing before advancing a deal for Shalit's release. "Opening [the crossing] will strengthen Hamas, so if we do it, it must be linked to Gilad Shalit and with [cooperation] of Abu Mazen's forces," Livni said, referring to Palestinian President Mahmoud Abbas

While the Egyptian-mediated cease-fire between Hamas and Israel stipulates that Israel gradually lift its siege on the Gaza Strip and reopen border crossings, Israel has sporadically shut the crossings down to truce violations.

Meanwhile, Egyptian President Hosni Mubarak on Sunday hosted Abbas, for talks on a number of regional issues including factional Palestinian violence and a deal to release Shalit.

Palestinian envoy to Egypt, Nabil Amar, told the Saudi Al-Watan daily on Sunday that he hoped the deal would be sealed soon, as the ensuing battles for his release have cost the lives of too many Palestinians.

Shalit was captured by Gaza militants in a cross-border raid in June 2005. There have been various reports on his condition as well as a few signs of life, but for the most part, the Egyptian-mediated negotiations for his released have been kept mum.

Israel and Hamas have not yet agreed to renew negotiations over the release of Shalit's release, despite the completion of the Hezbollah prisoner swap and the relative quiet on the southern front that were supposed to advance talks on a swap with Hamas.

Hamas seems now to be refusing to back down from the list of hundreds of prisoners whose release it demands. However, Israel has only approved 71 names on the list.

Israeli negotiator Ofer Dekel proposed in June to Egyptian mediator General Omar Suleiman to begin intensive talks over Shalit's release, and for the Egyptians to act as intermediaries between Hamas and Israel.

The idea was to renew negotiations immediately after the Hezbollah deal went through, taking advantage of the lull in hostilities in the Gaza Strip.

Despite rumors that Egypt would try to facilitate talks between Hamas and Israel, the militant group has not sent a high-level delegation to Cairo for talks with Suleiman, saying it is still conducting internal discussions on the matter.