A German mediator helping in prisoner exchange negotiations between Israel and Islamist militant group Hamas appears to have made a breakthrough .

The mediator was in the Gaza Strip to give Hamas details of Israel’s response to a proposed swap in which hundreds of jailed Palestinians would be freed in return for kidnapped Israeli soldier Gilad Shalit.

A Hamas official said he expected that the group’s leaders, exiled in Damascus, would be consulted – signalling a possible breakthough. Such meetings are normally only reserved for top-level policy making.

On Tuesday, Israel said it would not agree to all of Hamas' demands in the deal. Israeli Defense Minister Ehud Barak told reporters that Israel's priority was to bring Shalit home. However, he said that Israel was "not prepared to pay any price" for the soldier's freedom.

Hamas, which controls the Gaza Strip, is demanding the release of around 1,000 jailed Palestinians in exchange for Shalit, who was snatched by militants in 2006 during a cross-border raid.

Deportation question

Officials familiar with the talks said Israel was likely to demand that a number of the Palestinian prisoners not be allowed to return to their homes in the occupied West Bank for security reasons, because they would then be too close to Israeli cities.

They want them to be sent instead to the Gaza Strip or foreign countries, Israel Radio reported.

Hamas had accepted that some released prisoners would be exiled but wanted them to be able to choose their destinations, the officials said.

"So far, Hamas still rejects the principle of deporting a large number of prisoners out of the Palestinian territories, and still wants to reduce the number of prisoners that Israel wants to deport to Gaza or abroad," senior Hamas official Ayman Taha told Germany's dpa news agency.

It was unclear whether Israel had dropped its opposition to freeing 20 senior militants whose release Hamas has demanded. Israel holds them responsible for the deaths of dozens of its citizens.

The German mediator visited the Gaza Strip after intense negotiations between Israeli Prime Minister Benjamin Netanyahu and Hamas on Monday. For a while it looked as if the sides were close to reaching a deal - Netanyahu held five meetings in less than 48 hours with six top ministers.

Hamas accusations

But on Tueday another message was sent when Netanyahu's office issued a terse statement saying only that the Israeli leader had instructed his negotiating team to continue efforts to free Shalit.

In response, Hamas accused accused Israel of trying to hinder the long-sought prisoner swap.

"The scene that took place yesterday inside the Israeli government is proof that Israel is responsible for hindering and delaying the prisoner exchange agreement," Hamas spokesman Sami Abu Zuhri told the AFP news agency.

"The division inside the Israeli government is responsible for hindering the agreement," he added.

Netanyahu's dilemma

Right-winger Netanyahu has made his tough stance on negotiating with militants a central issue in his political career. He is also under pressure from the families of those Israelis killed by the militants, who oppose their release.

An exchange in the coming days would coincide with the first anniversary of an offensive launched by Israel in the Gaza Strip on December 27 last year. At least 1,400 Palestinians and 13 Israelis were killed in the three weeks of conflict that followed.

Shalit, now 23, has been held captive in the Gaza Strip since 2006. There are some 11,000 Palestinians held in Israeli jails.


rc/jen/AFP/dpa/Reuters
Editor: Chuck Penfold