A deadline set by Gaza militants for Israel to free prisoners in exchange for a captured soldier expired in the early hours of this morning with Israel continuing to reject any swap but saying that its information was that the soldier was still alive.

As the 6am (0300 GMT) deadline passed, one of the three Palestinian factions holding Corporal Gilad Shalit sent conflicting signals as to his fate.

But Avi Pazner, an Israeli Government spokesman, told French LCI television: "We know that until now Gilad Shalit is alive, we know that he is injured, that he was seen by a Palestinian doctor a few days ago.

"We are sure of our information. As I speak to you, he is alive," he added.

Corporal Shalit was abducted on June 25 in a cross-border raid by three militant groups, including the armed wing of the ruling Hamas group, provoking the first Israeli incursion into Gaza since its forces left the territory last year. Israel has stopped short of a wider land offensive but has sent troops and armour into northern Gaza and bombed targets including government offices and a power station.

Yesterday's communiqué laying out the ultimatum did not say what would happen to the soldier if the militants' demands for the release of 1,000 Palestinian prisoners were not met. This morning, the smallest of the three militant groups, the previously unknown Islamic Army, said there would be no further information given on Corporal Shalit.

"Whether he will be killed or not killed, we will not disclose any information about the fate of the soldier. Discussion is closed," said the group's spokesman, Abu al-Muthana. But he added: "We do not kill captives. Our Islam requires that we treat captives well and fairly."

The crisis has been closely followed in France, because the 19-year-old corporal has dual French-Israeli nationality. Speaking in French, Mr Pazner said: "We do not have an exact idea of his injuries nor what treatment he is receiving. That is why it is imperative that this matter be resolved as soon as possible. Every day that goes by will be to the detriment of Gilad Shalit.

"We hope his captors understand the importance of Gilad Shalit being alive and in good health for all of us," he added, warning that Israel "does not negotiate with terrorists".

Palestinian security sources said that Israel had increased the number of armoured vehicles on the northern edge of the Gaza Strip. Overnight, an Israeli air strike in northern Gaza killed one militant and wounded two. The Israeli army said they were planting bombs.

In Gaza City, Israel fired a missile at the Islamic University, a Hamas stronghold. The army said it had attacked a building used by Hamas to plan attacks. Israel has also hinted that it could assassinate leaders of Hamas, whose government is under an international aid embargo, if Corporal Shalit is not freed.

"Hamas well understands the uncompromising message of the Israeli Government, that the sky will fall on them if they harm Gilad Shalit," Interior Minister Roni Bar-On told Israel Radio. "We will respond in a way the Palestinians haven’t yet seen if, heaven forbid, they carry out their threat."

Before the deadline passed, Israel Radio reported that Ehud Olmert, the Prime Minister, had already decided to continue the offensive. Israel also resumed artillery fire against northern Gaza after militants fired homemade rockets into Israel.

So far, mediation led by Egypt has failed to bear fruit. Hamas, which advocates Israel’s destruction, does not want to lose face by freeing Shalit without getting something in return. Israel says it does not want to set a precedent that could lead to more abductions.

Hamas sources told Reuters news agency that the group had been warned by Western diplomats that Israel had prepared a 13-man hit list headed by the exiled leader Khaled Meshaal and including Ismail Haniya, the Prime Minister, and Mahmoud al-Zahar, the Foreign Minister.

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