Gaza's militant Hamas rulers marshaled hundreds of thousands of supporters to a huge anniversary rally on Sunday, a show of muscle featuring a skit of a mock-captive Israeli soldier begging for his freedom.

Marking 21 years since its founding, a triumphant Hamas bragged about its violent exploits, promised more money to Gaza's impoverished people, and announced it would soon stop recognizing the legitimacy of Palestinian President Mahmoud Abbas, who rules only the West Bank now.

Organizers said about 300,000 Hamas supporters crowded into a dusty outdoor arena and spilled over into nearby streets. Many waved flags and sported baseball caps in the Islamic group's signature green color.

In the skit, Hamas paraded a Palestinian speaking Hebrew and dressed in an Israeli soldier's uniform - a reference to Israeli Sgt. Gilad Schalit, captured by Hamas-allied militants in June 2006.

"I miss my Mom and Dad," said the man playing the Israeli soldier, kneeling as he spoke. "Tell Olmert, why don't you take care of your soldier?"

The capture of Schalit in a June 2006 cross-border raid is an open wound in Israeli society. The taunt at the rally drew condemnation from Israel, which has been indirectly negotiating the soldier's release with Hamas for the past 2 1/2 years.

A spokesman for the Israeli government, Mark Regev, called the skit "another example of (Hamas) cruelty and inhumanity."

In comments aired Sunday, exiled Hamas leader Khaled Mashaal said a six-month truce with Israel would not be renewed after it expires this week. Interviewed on a Hamas-affiliated Lebanese TV channel, Mashaal did not explicitly threaten renewed attacks, saying instead that Hamas would respond to developments.

On Sunday, Israel closed its passenger crossing with Gaza to journalists in response to Palestinian rocket fire over the weekend. For much of the past month, Israel has banned reporters from entering the territory after militants fired rockets and mortars at Israeli communities.

Hamas, founded in Gaza in December 1987, is sworn to Israel's destruction and was involved in dozens of suicide bombings that killed more than 250 Israelis. It seized Gaza by force in June 2007 after months of fighting with Abbas' Fatah forces.

Hamas contends Abbas' term ends Jan. 8, four years after he was elected president. Abbas has argued that he had an additional year so the presidential term could dovetail with parliament's.

The huge turnout at the Gaza rally was a pointed display of strength directed at both Israel and Fatah, and further evidence of the Muslim militant group's unchallenged control over 1.4 million Gazans.

During an hourlong speech, the Hamas Gaza prime minister, Ismail Haniyeh, read out a list of construction projects and funds to be distributed to impoverished Gaza residents.

The projects indicate Hamas is still able to smuggle cash through tunnels that crisscross the territory's border with Egypt - at a time when the Western-backed Abbas government in the West Bank has struggled to pay salaries.

Hamas also bragged of attacks conducted against Israel in the past 21 years, inflating the numbers.

In his speech, Haniyeh said Hamas was only strengthened by Israeli sanctions.

"It is a letter to Obama, to the Zionists and those who stand in the same trenches as them: We say with confidence, you will not be victorious," Haniyeh said.

The U.S. and other Western countries designate Hamas as a terror organization. In a pre-election speech to a Jewish group, President-elect Barack Obama said he also considers Hamas a terrorist group.

Also Sunday, Israel said a delayed release of 227 Palestinian prisoners would take place on Monday. The release is a goodwill gesture to Abbas' Western-backed government.

The prisoners were to be released last week for the Muslim Eid al-Adha holiday.

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