LONDON (Reuters) - World leaders voiced hope on Tuesday that a major prisoner exchange between Israel and the Palestinians would help reinvigorate a peace process frozen for more than a year.
But while the release of Israeli soldier Gilad Shalit from Hamas-ruled Gaza in return for 477 Palestinians detainees was celebrated on both sides, it did not address any core disputes that have bedevilled peace talks for 20 years, analysts said.
There was no sign from Israel or Hamas, an Islamist group sworn to its destruction, or the Palestinian Authority of President Mahmoud Abbas, who favours negotiated peace, that the Egyptian-brokered deal could be a starting point for dialogue.
Still, world leaders nevertheless saw room for hope in an improvement of the regional atmosphere laying groundwork for a revival of peace talks shelved last year over Israel's continued expansion of settlements in the occupied West Bank.
"I would like to believe that this will permit the taking up again of discussions" between the Israelis and Palestinians, said French President Nicolas Sarkozy. "When everyone is speaking to each other, it facilitates things."
"For France, it's a very big relief, it's a great joy and it proves that even in the most difficult moments, there can be hope," Sarkozy said in southern France. Shalit holds dual French nationality and Paris has closely followed his plight.
British Foreign Secretary William Hague urged Israel to build on the momentum provided by the release of Shalit to advance peace talks with the Palestinians.
"It provides a glimmer of hope in an often bleak scene that a successful negotiation can be carried out on this difficult subject," Hague told Reuters during a trip to North Africa.
"In particular, we believe Israel should be ready to make a more decisive offer than Israeli leaders have made in recent years on the peace process to give talks a chance of success.
"I also hope," Hague added, that "it will encourage Israel to relax the controls on the crossing points into Gaza. The extent of the controls has generally served to strengthen Hamas rather than to weaken them."
REVIVAL OF PEACE PROCESS CREDIBILITY?
Israel struck the prisoner swap deal with Islamist group Hamas, which rules Gaza. Hamas does not recognise Israel and has refused to renounce violence, putting it at odds with Abbas who rules in the West Bank.
Analysts said the accord weakened Abbas, who has little to show for years of on-off talks with Israel, but world leaders looked to the agreement to have a broader, positive impact.
Middle East peace envoy and former British prime minister Tony Blair told the BBC he hoped the prisoner swap "offers us a moment of opportunity, and not simply in respect of Gaza where Hamas are presently in charge, but also for a ... revival of credibility in a peace process we really need to prioritise.
"What has happened offers a chance of a change of atmosphere, a change of context, but we've got to use that to push on and try to revive a credible negotiation for the two-state solution."
A spokesman for German Chancellor Angela Merkel said she counted on successful cooperation between Israel and Egypt leading to the prisoner exchange to defuse recent new tensions between the two, who signed a peace treaty in 1979.
"This would be an important contribution to the Middle East peace process," the Merkel spokesman said, alluding to Cairo's role as a mediator in Israeli-Palestinian disputes, particularly to do with security issues around Gaza.
German President Christian Wulff wrote to Israeli counterpart Shimon Peres and to Shalit's parents saying the prisoner exchange was "a sign of a peaceful future for Israel and the region."
U.N. Secretary-General Ban Ki-moon told reporters in Switzerland: "With this release, it will have a far-reaching positive impact to the stalled Middle East peace process."
But most analysts were doubtful, seeing the prisoner swap as a one-off that did nothing to tackle yawning political, ideological and religious divisions between Israel and the Palestinians and even within their own camps.
Abbas wants a Palestinian state in the West Bank and Gaza with East Jerusalem as its capital, alongside Israel. But his adversary Hamas does not accept the validity of peace talks.
Israel sees Jerusalem as its eternal, indivisible capital and major West Bank settlement blocs as a future part of the Jewish state. It wants continued control over a Palestinian state's external borders.
Most Israelis in opinion polls favour a two-state solution, but their governing coalitions depend on rightist parties who back settlement expansion on land seen by Palestinians as crucial to their hope for a viable state.
Abbas is now pushing for recognition of statehood at the United Nations, a unilateral move opposed by Israel and its main ally, the United States. He is unlikely to retreat, especially with Hamas seemingly bolstered by the swap accord.
"I tend to be rather sceptical that this could signify any real turning point in negotiations considering the multiplicity of obstacles which deter a peace settlement," said Anthony Skinner, Middle East director at Maplecroft think tank.
"Not least the status of Jerusalem, land swaps in the context of a pre-1967 border agreement, continuous expansion of Israeli settlements, upholding the right to return for Palestinians in the region, the threat of continuous attacks by militants and the PA's will to gain international recognition."
(Additional reporting by Yann Le Guernigou and John Irish in Paris, Alexandra Hudson in Berlin, Peter Apps and Stephen Addison in London, Adrian Croft in North Africa, Catherine Hornby in Rome, Stephanie Nebehay in Geneva, Crispian Balmer in Jerusalem; Editing by Philippa Fletcher)