JERUSALEM - Prime Minister Ehud Olmert told lawmakers Monday that Israel would not agree to open a key Gaza crossing - explicitly rejecting a chief condition Hamas militants have set for any truce with Israel.

Egypt has been trying for months to negotiate a deal that would end the rocket and mortar fire from Gaza at southern Israel, and the harsh air and ground strikes they provoke from Israel. But each side has set tough conditions.

Israel wants progress on negotiations to return an Israeli soldier captured by Hamas-allied militants nearly two years ago. And Hamas wants Israel to immediately open blockaded Gaza border crossings, which were closed to all but humanitarian aid after the Islamic group violently seized control of Gaza a year ago.

On Monday, Olmert told parliament's Foreign Affairs and Defense Committee that the Rafah crossing on the Egyptian border - Gaza's main gateway to the outside world - would not be pried open.

"We won't be willing to open the Rafah crossing at this point," a meeting participant quoted the prime minister as saying. Another official had no answer when asked if that meant the passage could be opened later.

Both Israeli officials spoke on condition of anonymity because panel proceedings are supposed to be confidential. But the proceedings are routinely leaked, and Olmert likely used the platform to make his position clear to Hamas.

Israeli officials have previously said they fear that if the border crossings are opened, Hamas would consolidate its rule over Gaza and restock its arsenal.

Hamas spokesman Ismail Radwan accused Israel of "putting obstacles in front of Egyptian efforts to achieve calm."

"The Rafah border must be opened" as part of the calm, Radwan said, repeating Hamas' demand that Egypt open the crossing if Israel doesn't.

Although the Rafah crossing lies on the Gaza-Egypt border, the passage has been closed because Europeans monitoring the crossing require Israeli security clearance to operate. That clearance has not been given since Hamas took over Gaza.

Hamas wants the crossing reopened and a role in monitoring the border - a concession that would be tantamount to recognizing the Islamic group's rule of Gaza. Egypt has rejected that demand, and called for a return to the 2005 agreement that gives Israel and EU monitors a supervisory role.

The breakdown of the indirect truce talks would increase the likelihood that Israel would launch a threatened major military operation there against rocket and mortar squads. Olmert reiterated such a possibility in his remarks before the committee on Monday, meeting participants said.

In January, Hamas militants frustrated by the Israeli blockade blew holes in the border wall with Egypt at Rafah, allowing hundreds of thousands of Palestinians to stream out of Gaza unchecked and stock up on food, fuel and other goods made scarce by the blockade. Egypt sealed the border less than two weeks later.

Olmert told lawmakers that Israel would continue to open other Gaza crossings to humanitarian aid.

"We won't allow optimal conditions in Gaza, but we won't allow starvation, nor will we prevent medicines from entering Gaza," he was quoted as saying.

Palestinians have carried out a series of attacks on Israeli frontier terminals in the past two weeks, most recently a failed suicide bombing last week at the Erez crossing, the main passage for Gazans seeking medical treatment. Although the crossings are used to deliver humanitarian aid and basic supplies to Gaza, militant hard-liners view them as symbols of Israel's economic blockade and attack the passages to try to derail peace efforts.

The latest bombing cut off two of the electrical lines Israel runs into northern Gaza, and on Monday, some 200,000 Gazans remained without electricity or running water.

Israel already restricts fuel supplies to Gaza to pressure militants to stop their attacks on southern Israel, so there is little fuel to power generators or water pumps.

An Israeli military spokesman said repairs were under way but they would take time because of security considerations.

In a related development, Thke Israeli military said that nonessential staffers have been pulled out of the Erez crossing because of numerous shootings, bombing attempts and other threats. They've been relocated to a base farther from the border.

Maj. Peter Lerner of the military's liaison unit with Gaza and the West Bank did not say how many people have been moved. Combat troops were not relocated, he said.

Hamas, which rejects Israel's right to exist and has killed more than 250 Israelis in suicide bombings, is not involved in peace talks Israel launched with Palestinian moderates in the U.S. in November.

Olmert and moderate Palestinian President Mahmoud Abbas pledged at that conference to try to finalize a peace deal by the end of this year, but both camps have suggested that it is not realistic to expect a fleshed-out accord by the time U.S. President George W. Bush leaves office in January.

Olmert told Monday's parliamentary hearing that he thought it was still possible to reach unspecified "understandings" in 2008.