Prime Minister Benjamin Netanyahu signalled Monday Israel would use the bodies of Palestinian militants as bargaining chips to retrieve the remains of soldiers believed held by Gaza's Hamas rulers.

Israel blew up a tunnel stretching from the Gaza Strip into its territory last week, leaving at least 12 militants dead. On Sunday, Israel announced they were in possession of the bodies of five of them, members of the Islamic Jihad.

Speaking at a ceremony in northern Israel on Monday, Netanyahu indicated Israel would seek to use the five bodies as part of a deal to receive the remains of two Israeli soldiers.

"We have a simple rule: Whoever attacks us, we attack them. Secondly, we don't give free gifts," Netanyahu said in remarks relayed by his office.

"We'll bring our sons back home. There are no free gifts."

The remains of the Israeli soldiers, killed in the 2014 Gaza war, are thought to still be in the coastal territory.

Two Israeli civilians, said to be mentally unstable, are also believed to have entered Gaza and to be held by Hamas.

Islamic Jihad said Sunday it would take no part in any exchange deal.

Indirect negotiations led to a 2011 deal which saw Israel release more than 1,000 Palestinian prisoners in exchange for soldier Gilad Shalit, who had been held for five years.

Source: AFP