"Israel is prepared for any threat - both in defense and attack. We are determined to defend ourselves, and we are also determined to exact a heavy price from any enemy who dares to attack us - from any arena.

At the same time, we are negotiating for the release of our hostages. This is a first and foremost moral and national task. We are conducting very complex negotiations when on the other side is a murderous, uninhibited and recalcitrant terrorist organization.

I want to emphasize - we are conducting negotiations, not surrendering. There are things we can be flexible about, and there are things we can't be flexible about - and we insist on them. We know very well how to differentiate between the two.