According to the sources, the progress made is not dramatic, but a change occurred due to Prime Minister Benjamin Netanyahu's strong desire to resolve the matter.
The Egyptian sources told the newspaper that Netanyahu had agreed to resume the indirect negotiations between Israel and Hamas from the point they left off during former Prime Minister Ehud Olmert's tenure, noting that that was a very advanced point.
According to the report, Israel agreed at the time to release 325 prisoners out of the 450 demanded by Hamas, and had asked the Palestinian organization to change the remaining 125 controversial prisoners.
Hamas is said to have agreed, after Netanyahu took office, to have some of the prisoners deported upon their release. Palestinian sources reported that Hamas reached this stance after holding a poll among the prisoners on the matter.
The newspaper also reports that an extensive diplomatic activity has been taking place between Israel and Egypt in recent weeks, following Netanyahu's visit to Sharm el-Sheik before heading to the United States and President Shimon Peres' visit to Egypt in July.
According to Israeli sources, the past months have seen a significant reinforcement of the ties between the two countries, including in terms of the security cooperation, after Egypt uncovered al-Qaeda and Hezbollah terror cells which were allegedly planning a series of terror attacks against Israeli targets in Sinai and against Egyptian targets, as well as assassinations of Egyptian officials and Israel's Ambassador to Cairo Shalom Cohen.
Netanyahu telephoned Egyptian President Hosni Mubarak on Monday evening and thanked him for thwarting the plan to target the Israeli ambassador or Israeli Embassy in Cairo. According to reports, the two leaders discussed ways to advance the prisoner exchange deal, as well as developing the relations between the two countries.
Gilad Shalit was kidnapped into the Gaza Strip 1,144 days ago.