By Noah Browning
GAZA (Reuters) - Residents of the Gaza Strip, mostly house-bound and fearful after 13 days of Israeli bombardment, lit fireworks and chanted "God is great!" into the early morning darkness on Monday after Hamas said it had captured an Israeli soldier.
Abu Ubaida, the masked and camouflaged spokesman of the Palestinian Islamist militant group's armed wing, announced that a soldier named as Shaul Alon was seized in heavy fighting on the Gaza border on Sunday.
He displayed Alon's photo ID and serial number but showed no image of him in captivity.
Israel's envoy to the United Nations denied the claim but its army has neither confirmed nor denied the report and a spokesman said on Monday: "We still cannot rule it out."
The report buoyed weary Gazans' flagging morale. If confirmed, it would fulfill long-standing promises by Hamas to grab troops in hopes of trading them for Palestinian prisoners, raising its popularity.
"Hundreds of martyrs have fallen and we're under attack 24-hours a day... but today is like a holiday and we feel joy that a soldier is in our hands and we hope more will follow," said vegetable seller Musa Abu Attiyeh, pausing as an Israeli rocket whizzed past and crashed nearby, shaking his shop.
"Abu Ubaida's words are bullets, stronger than bullets. He doesn't lie, ever," the shopkeeper said.
"Now it's the Jews' turn to feel the pressure and worry, and we will see our sons from the jails celebrating at home soon, God willing."
Thirteen Israeli soldiers were killed in heavy fighting on Sunday in the eastern border town of Shejaia, where Hamas said it snatched the soldier in a rocket strike on an Israeli troop carrier.
Israel has not yet released the names of all the dead, suggesting it is still verifying their identities from the remains.
Hamas gained Palestinian acclaim and plaudits from backers in the Arab world when in 2011 it parlayed the release of an Israeli conscript soldier abducted five years earlier in a cross-border raid into the freeing of more than 1,000 Palestinians from Israeli prisons.
Gilad Shalit's lengthy captivity in Gaza was a wrenching ordeal for Israel, where military service is compulsory and many identified with his predicament. Most young men serve three years and women two in the armed forces from age 18. Many men in their 20s and 30s are recalled annually for a few weeks' reserve duty.
An international campaign by Shalit's family kept him in the spotlight and pressured the country's leadership, which yielded to the deal despite fears it would encourage more abductions.
The stakes are higher now after an Israeli arrest campaign in the occupied West Bank netted hundreds of suspected Palestinian militants, including some freed in the 2010 swap.
The roundup was launched after two suspects allegedly linked to Hamas kidnapped and killed three Jewish teenagers in June. Hamas bristled, calling it a violation of their agreement and an attempt to decimate the group's presence outside Gaza.
Even before its claim to have abducted Alon, Hamas insisted that the release of those prisoners was a condition for a ceasefire in the current round of Gaza fighting, which has killed more than 500 Palestinians, most of them civilians.
Israel has balked at the demands and said it will continue its aerial and ground assault until the militants' hail of rocket fire on its cities ceases.
Hamas did not specify whether the soldier was alive or dead. In 2008, Lebanese Hezbollah guerrillas traded the bodies of two soldiers it had captured and killed two years earlier for several of its prisoners in Israel.
OVER 6,000 PRISONERS
Facing grinding poverty and unemployment, Gaza's 1.8 million residents had become increasingly discontented with Hamas's governance of the Gaza Strip. The militant group continued to emphasize its abduction strategy as a great hope.
A billboard on Gaza City's main street shows a Palestinian fighter in fatigues and a chequered headscarf with a limp Israeli slung over his shoulder as a tank fires in the background. It is an advert for a mini-series on Hamas's TV channel depicting the very events the group now boasts.
Palestinian sympathy runs deep for some 6,000 prisoners in Israeli jails - swelled by more than 1,000 arrests in June and July. Many are suspected of launching attacks on Israel. Hundreds are held without trial on secret charges.
"To free them and bring joy back to their mothers - this (abduction) is the way to do it. Now we think they'll lighten their bombing on us, they don't want to hurt their man," Gaza resident Sameh Abu Msameh said.
"(The soldier) will be released when we get a truce and our prisoners... Until then the fight will go on, then we'll send him back home on one of our rockets," he said with a laugh.
(Editing by Paul Taylor)