GAZA (Reuters) - Israel has rejected a demand for the release of two Hamas commanders as part of any exchange for a captured Israeli soldier, a source close to negotiations said Wednesday, signalling talks had hit a snag. Hamas still insists on its demands, the source, who declined to be named, told Reuters, naming the two top Hamas prisoners as Ibrahim Hamed and Abdallah Barghouti. An Israeli official said: Were not willing to discuss publicly at this stage the names of the people who might or might not be in a swap. Hamas negotiators who have been consulting their exiled leadership in Damascus would return Wednesday evening to Egypt, which together with Germany has been mediating the indirect talks between the enemies. Senior Hamas leader Khalil al-Hayya was quoted by a pro-Hamas website as saying Israel was responsible for undermining a deal because it had not agreed to the demands of the Palestinian factions holding captured soldier Gilad Shalit. Abdallah Barghouti is serving 67 life terms for his role in attacks on Israelis. Hamed was head of Hamas armed wing in the West Bank before his arrest.