Jerusalem ? Israel declared Wednesday that it will not open the Gaza Strip’s blockaded borders until Hamas militants free a captured Israeli soldier, dealing a blow to Egyptian efforts to broker a long-term cease-fire.

The decision was condemned by Hamas, which is desperate for border crossings to be opened in order to start repairing destruction from Israel’s military offensive in the coastal territory last month.

In parallel, the prime minister of the rival Palestinian government in the West Bank announced plans to stream reconstruction money directly to the people of Gaza. That would effectively sideline the Hamas administration in Gaza.

Gaza’s borders have been sealed by Israel and Egypt since the Islamic militants of Hamas violently seized control of the territory nearly two years ago, driving out supporters of Palestinian President Mahmoud Abbas.

Israel allows only vital humanitarian supplies to enter, and the Security Cabinet decided that closure will stay in place until Sgt. Gilad Schalit is released.