The abduction of Corporal Gilad Shalit, 20, in June 2006 claimed by three Palestinian militant groups, triggered a new wave of violence in the region as Israel sent troops into Gaza to secure his release.
Shalit's release is considered a crucial aspect of peace talks between the Israelis and Palestinians.
"Israel cannot pay whatever price is demanded by Gilad Shalit's abductors," local radio quoted Ehud Olmert as telling the parliamentary commission on foreign affairs and defense.
Olmert expressed dismay at the number of prisoners Palestinians want freed from Israeli jails in exchange for the corporal.
"The list disappoints us and creates expectations we cannot justify," the Ynet Web site, connected with the Yedioth Ahronoth tabloid, quoted the prime minister as saying.
Media have put the number of names on the list at more than 300, including high-ranking activists of Palestinian groups serving terms for terrorism.
