Israel to withhold bodies of Palestinian militants, seeks trade

Israel said on Sunday it will withhold the bodies of Palestinian militants killed in attacks against its citizens as it seeks to pressure the Islamist movement Hamas to return the remains of soldiers and hand back missing Israeli civilians.

Hamas says it is holding two Israeli soldiers whom the army declared dead after they were lost in action in the 2014 Gaza war. The group also says it is holding two Israeli civilians who strayed into the Hamas-ruled Gaza Strip.

The country's security cabinet announced the move after the release of mocking videos from the armed wing of Hamas.

The decision will now become a permanent change in policy, it said.

The two video clips published by the Hamas military wing show a mock birthday for Oron Shaul, who Israel said was killed during the Gaza War in 2014.

In one, his face has been digitally inserted over someone else's body, bound and in army fatigues.

He is visited by the Israeli Prime Minister Benjamin Netanyahu in a clown's costume, who blows out the candles on a birthday cake.

Shaul, 21, was one of seven soldiers reported killed in an incident in Shejaiya, near Gaza City. But Hamas has never confirmed that Shaul is dead.

After the meeting of the security cabinet, the Prime Minister's office released a brief statement on the decision.

"The security cabinet discussed ways to effect the return of fallen soldiers and of civilians held in the Gaza Strip ... and decided that (the bodies of militants) should be buried, rather than returned," the statement said.

Bodies buried under the new policy could be exhumed and returned later as part of exchanges.