Hamas has produced an unusually sophisticated animated film apparently pressing for a deal that would bring about the release of Gilad Shalit, the Israeli soldier captured near Gaza nearly four years ago.

The Israeli government reacted angrily to the film, describing it as "deplorable" and blamed Hamas, the Palestinian Islamist movement, for the failure to agree a deal for the release of Shalit, who was captured in June 2006. He is alive and believed to be held somewhere in Gaza.

The three-minute film depicts Shalit's father, Noam, walking empty streets clutching a photograph of his captured son. He passes advertising hoardings that show several Israeli leaders promising to arrange Shalit's release and then finds a newspaper discarded in a rubbish bin showing on its front page a $50m reward for information on his son's case.

As time passes without his son's release Shalit's father grows old, with a beard and a cane. Eventually the soldier is returned, delivered in a coffin draped in the Israeli flag at the Erez checkpoint at the entrance to Gaza. Shalit's father then wakes up from his dream to find himself sitting at a bus stop. The words "There is still hope" appear in Hebrew and English.

It is the latest product of an increasingly sophisticated Hamas media operation, including a movie studio of sorts on the site of a former Jewish settlement in Gaza.

The animation was broadcast on Israeli television to an audience that is by now familiar with Noam Shalit, the dignified father who has long campaigned for his son's release and has urged both Israel and Hamas to make a deal.

In a statement, Noam Shalit dismissed the film as "psychological warfare".

"Hamas leaders would do better if instead of producing films and performances, they would worry about the real interests of the Palestinian prisoners and the ordinary citizens of Gaza who have been held hostage by their leaders for a long time," he said.

A deal between Israel and Hamas, negotiated by German intelligence officials, appeared close at the end of last year but fell through at the last minute. Each side blamed the other. Hamas was to release Shalit and in return Israel would free hundreds of Palestinian prisoners from Israeli jails. About 6,600 Palestinians are held in Israeli jails, more than 200 of them without charge.

Shalit was last seen in a video released by his captors in October. He appeared tired but unhurt.

Last week the Israeli authorities allowed the daughter of a Hamas interior minister, Fathi Hamad, to leave Gaza through Israel to reach a hospital in Jordan for urgent medical treatment. She was allowed out reportedly after the intervention of the Jordanian monarch, King Abdullah.

In a separate incident on Sunday night Israeli troops killed a Hamas militant in Hebron on the occupied West Bank. Ali Swaiti was suspected of shooting dead an Israeli border policeman in 2004. The Israeli military said Swaiti was killed when he refused to surrender.