Israel's Defence Minister Avigdor Lieberman said in a statement on Sunday that he ruled out the release of Palestinian attackers jailed in Israel in exchange for Israeli citizens and bodies of soldiers.
Liberman said the return of Israeli citizens and bodies of soldiers continues to be a top priority.
"We cannot repeat the mistake of the Shalit deal," Lieberman said, referring to the 2011 swap deal with Hamas, in which Israel released 1,027 Palestinian prisoners in exchange for the release of soldier Gilad Shalit, Xinhua reported.
"1,027 terrorists were released including murderers and their activators such as Mahmoud Kawassmeh, who was released to the Gaza Strip and funded the kidnapping and murder of three youths, and Yahya Sanwar, who leads Hamas in Gaza.
Sanwar has now made stringent demands which cannot enable any kind of deal," Liberman said.
"It is important to draw up definitive guidelines for the state and its representatives and to stand fast before our enemies and emphasize to them that we have no intention of compromising Israel's security," he said.
Soldiers Oron Shaul and Hadar Goldin were killed in Israel's offensive in Gaza in 2014. Their bodies are believed by Israel to be held by Hamas, the Islamist organization that controls the Gaza Strip.
Israel believes that two Israeli civilians, Abera Mengistu and Hisham al-Sayed, who have voluntarily crossed into Gaza, are also being held there.
Hamas has officially denied holding Mengistu.
Last week, Lotan handed his resignation to Prime Minister Benjamin Netanyahu. No reason for the move was publicly cited.
Efforts to draft a deal through different brokers over the past years have yet to yield any results.