"The next hours are critical, sensitive and serious. And though the efforts are still ongoing, we have not reached an acceptable solution until now," Abbas' office said in a separate statement.
"After a week of continuous and long contacts with all parties, Palestinian, Arab, international and particularly Egyptian, the [Abbas] ... is still exerting efforts to stop the Israeli aggression and avoid more disasters for the Palestinian people," the statement said.
Abbas also appealed to all parties to work to find "an acceptable solution" to the crisis.
Israel said Saturday that it rejects a demand by the three Palestinian militant groups holding Shalit to free 1,000 security prisoners being held in its jails and end the IDF offensive launched in Gaza in the wake of his kidnap.
Meanwhile, a Palestinian deputy minister said Saturday that Shalit has received medical treatment for wounds sustained during his abduction and that he is in stable condition.
Speaking at a news conference in Ramallah, Deputy Minister for Prisoner Affairs Ziad Abu Ein cited unidentified "mediators" as telling him that Shalit had been wounded during his abduction.
"He has three wounds," Abu Ein said. "I guess shrapnel wounds." He did not give further details.
But Abu Ein told Haaretz later Saturday that he had simply been quoting media reports and had not received any new information.
Channel 1 television, citing a senior Israeli security official, reported Friday night that a Palestinian doctor treated Shalit for minor shoulder and stomach wounds, and that the soldier was in good condition. Israel Radio said the doctor's visit took place Thursday.
A statement released overnight Friday by the three groups did not say explicitly that the soldier would be freed should their demands be met. But a spokesman for the military wing of the governing Hamas party, one of the three factions involved in the kidnapping, said the demands specified in the statement were in fact conditions for releasing Shalit.
Repeating Israel's refusal to bargain for Shalit's release, Foreign Ministry spokesman Mark Regev said in response to the statement that "Prime Minister Ehud Olmert has reiterated that there will be no deals, that either Shalit will be released or we will act to bring about his release."
IDF troops entered the southern Gaza Strip in the early hours of Wednesday, in a bid to pressure the Palestinians to release Shalit.
The militants' demand Saturday for the release prisoners was the second statement by the groups since Shalit's abduction. "We are declaring to the public our just and humanitarian demands," the statement said.
The statement repeated an earlier demand for the release of women prisoners and minors in exchange for information on Shalit, but made the added request for Israel to free 1,000 "Palestinian, Arab and Muslim prisoners."
It said these would have to include all Palestinian faction leaders as well as humanitarian cases.
The statement cast doubt on hopes voiced by mediators that Shalit could be freed soon.
"In spite of the good efforts of the mediators who tried in silence to speed up the treatment of this humanitarian matter, the enemy and their political leadership are still under the pressure of the security and military command," it said.
"The escalation and arrogance mean the enemy will be responsible for the bad consequences," it said.
Qassam lands hundreds of meters from Ashkelon
Also Friday, a Qassam rocket fired from the Gaza Strip landed within hundreds of meters of Ashkelon, in what police said was the closest a Qassam strike has come to the southern city.
Police confirmed that the rocket was an improved version of the Qassam. No injuries were reported in the incident.
Early Friday, the IAF struck the Palestinian Interior Ministry in downtown Gaza City, Palestinian witnesses said, setting it on fire. There was no word of casualties.
The Interior Ministry is nominally in charge of Palestinian security forces, though Abbas removed most of its authority.
The IDF confirmed its planes hit the office of Interior Minister Saeed Siyam, which it called "a meeting place to plan and direct terror activity."
A Palestinian militant injured in the strike died of his wounds early Friday, the first fatality in the IDF incursion in Gaza, hospital officials said. The local leader of Islamic Jihad, Mohammed Abdel Al, 25, had been seriously wounded in an air strike in Rafah in southern Gaza.
Three Fatah militants said they were wounded early Friday in a gun battle with IDF forces in northern Gaza, while the army denied troops had entered or fired into the territory, where forces have been massing.
Palestinian hospital officials said a 5-year-old girl was wounded in an air strike in northern Gaza early Friday. Doctors said her condition was not serious.
On Thursday night, IDF artillery shells hit the electricity distribution network in the northern Gaza Strip, plunging parts of the area into darkness.
Palestinian officials said two power transformers were struck, and two security officers were wounded by shrapnel. Dr. Ali Mousa, director of the Abu Yousef al-Najar Hospital in Rafah, also said a 15-year-old boy was moderately wounded by shrapnel in the blast.
The strike came two days after IAF aircraft attacked a major Gaza City power station, reportedly leaving roughly two-thirds of Gaza's 1.3 million residents without electricity.
The IDF confirmed it had been firing artillery at open spaces in the area at the time of Thursday's incident. The army said it has a report of an electrical pole being hit and was checking if the artillery fire was in any way related.
According to information gleaned by the PA, Shalit is being held in the Khan Yunis refugee camp in southern Gaza. Peretz said Thursday afternoon that the IDF would sustain its blockade on the Gaza Strip until Shalit is brought home safely.
Militants killed in Nablus
In the West Bank, IDF troops Friday shot and killed two Palestinian militants during a fierce gunbattle in a Nablus cemetery, Palestinian security officials said.
The soldiers surrounded the cemetery, trapping four militants inside. Initially, two of the militants were arrested, one fled and one was killed, the security officials said. The militants belong to the Al-Aqsa Martyrs' Brigades, which is tied to Fatah.
A military source said shooting broke out when troops entered Nablus on a raid to arrest militants. The troops fired back, killing the first militant, the IDF said. The second militant was killed in a exchange of fire which pursued after he had already been arrested by troops.
Two Hamas operatives killed in further air strikes===================================
Well this is what happens when a terrorist goverment is elected.