GAZA, April 25 (Reuters) - Wielding art instead of arms, Hamas issued an animated video on Sunday aimed at pressuring Israel into trading hundreds of jailed Palestinians for Gilad Shalit, a soldier held captive in Gaza for almost four years.

The 3-minute cartoon shows Shalit's father, Noam, pacing a dream-scape of empty streets under billboards bearing the vows of Israeli leaders to recover his son. Grown stooped and bearded, he finally receives the soldier in a flag-draped coffin.

There is still hope, reads a closing caption in Hebrew.

The cartoon, which first appeared on the website of the Islamist group's armed wing (www.alqassam.ps), was also distributed to Israeli television stations.

It marked a departure from Hamas's habitually fiery denunciations of the Jewish state.

Hamas said it wanted to reach the wide Israeli public and end the months-long stalemate in German- and Egyptian-mediated talks on a prisoner swap.

Israel has balked at demands from Hamas, which controls the Gaza Strip and refuses to accept a permanent peace accord, that Palestinian militants go free as part of any deal.

Our message is clear, and that is that Shalit's case must end with the release of our prisoners. Otherwise, he may end up like the missing Ron Arad, a Hamas source said.

He was referring to an Israeli airman widely presumed to have died in captivity after he bailed out over Lebanon in 1986 and was seized by guerrillas. At least one Israeli station said it would not broadcast the Hamas cartoon, which was spurned by Noam Shalit as the latest Hamas bid to wage psychological warfare.

After hinting that the soldier had been killed in Israel's Gaza offensive, Hamas released a first video of him as a goodwill gesture in October.

The leaders of Hamas would do better if, instead of producing films and exhibits, they would attend to the real interests of Palestinian prisoners and the ordinary residents of Gaza, Shalit said in a statement, alluding to an embargo on the territory which Israel has linked to the soldier's plight.

Shalit's family and supporters are conducting their own pressure campaign on the Israeli government. This has included a television spot showing the soldier's face morphing into Arad's.