The nightmare for kidnapped BBC journalist Alan Johnston and his family appeared far from over today after his captors threatened to kill him if their demands were not met.

There had been hopes the reporter would walk free sometime over the weekend after Hamas officials indicated that his release was imminent.

But the prospect of a swift end to his ordeal now lies shattered after the Army of Islam warned it would have no qualms in killing him if it did not get what it wanted.

In a chilling video message broadcast by satellite channel Al-Jazeera, the group insisted no deal had been made regarding the Scot's release.

And a spokesman for the group said: "If the situation gets more complicated concerning us and our group, then we will ingratiate ourselves to Allah by slaying this journalist."

The authenticity of the video - which came after a week of crisis in Gaza in which Hamas took control away from Fatah - could not be independently confirmed.

Hamas initially said it had made contact with Mr Johnston's kidnappers and would work to win his release.

Negotiations were thought to be taking place through a mediator. But yesterday a Hamas spokesman in Gaza declared there had been no new developments in the case.

The 45-year-old, from Argyll, has been held since March 12, after he was snatched from a street in Gaza City by a group believed to have links to Hamas.

His disappearance is the longest of any Western journalist abducted in Gaza and has sparked numerous protests and solidarity marches in London and the Palestinian territories.

A message purporting to be from his captors has demanded the release of Islamic prisoners, including Palestinian-born Islamic cleric Abu Qatada who is being held in Britain.

Qatada is suspected of close links to al Qaida and is currently held by the UK Government as a threat to national security.

Two weeks ago, the correspondent was seen for the first time since his abduction in a video posted on a website used by Islamic militants.

He appeared calm and said he was being well-treated and was in good health but then launched into what appeared to be a heavily-staged attack on British foreign policy.

Palestinian officials have said they know where to find Mr Johnston, but have held back on raiding the hideout at Britain's request for fear of harming him.

A BBC spokeswoman said the corporation was "watching developments very closely".

A Foreign Office spokesman said: "These videos only add to the distress of Alan's family and friends.

"We continue to urge Alan's safe and swift release and welcome the efforts of all those in the Palestinian territories to that end."

The ongoing trauma for Johnston and his family comes as political divisions in Gaza continue to deepen.