Netanyahu: No Shalit deal yet

Prime Minister Benjamin Netanyahu refused to address recent reports indicating progress on a prisoner swap with Hamas that would see captive soldier Gilad Shalit returned to Israel, saying a deal with the Islamist group has yet to be finalized.

During a Likud faction meeting on Monday, the PM said any prisoner exchange agreement would be discussed by the Knesset and would require the cabinet's approval.

"I cannot say yet whether a deal will in fact be struck. It is not only up to us. There is hesitancy on the part of the other side as well," he said.

"It is still unclear what will happen – what will be offered and to what we will agree to."

During the meeting, Netanyahu spoke of the dilemma Israel is facing. "On the one hand, we want to look after our soldiers and bring them back home - a value that our nation and Jewish tradition hold in the highest regard - but on the other hand we want to avoid future kidnappings."

A delegation from Hamas, which controls Gaza, crossed into Egypt for a meeting with Egyptian security officials in Cairo to discuss the deal that Egypt and Germany have been mediating.

According to a member of the delegation, which is headed by Mahmoud al-Zahar and consists of senior Hamas figures from Gaza and Damascus, the Islamist group insists that Israel release imprisoned Arab-Israelis and residents of east Jerusalem as part of the deal. Israel has so far refused to include them in any prisoner swap.

A Hamas source told Ynet that the talks in Cairo are also focusing on Israel's demand that some of the Palestinian prisoners be exiled and forbidden from returning to their homes in the West Bank.  

'Premature to talk about any results'

Officials close to the talks said Israel agreed to include in the exchange for soldier Shalit some 160 prisoners whose release it previously vetoed. But both sides have publicly avoided comment or sought to play down talk of an imminent deal.

Shalit was captured by Hamas-led gunmen who tunneled into Israel from Gaza in 2006. Israel has linked any major easing of its blockade on the territory to the soldier's return home.

"The Shalit episode is about to be closed," one of the officials said.

Sources on both sides told Reuters there were hopes that a deal might be struck by the end of the week, when the Muslim festival of Eid al-Adha begins. But one Hamas official, Sami Abu Zuhri, sought to play down speculation that a deal was done.

"We stress that it is premature to talk about any results regarding the prisoner swap deal," Abu Zuhri told Reuters.

The Prime Minister's Office announced earlier that some of the recent reports regarding a prisoner exchange deal for Shalit's release "are not credible and some of them are even intentionally distorted."

"Many details coming from abroad and in foreign media are being published lately, but they are not credible and some of them are even intentionally distorted. Efforts to secure Gilad Shalit's release are continuously underway, out of the media's view, and we have no intentions of commenting beyond that," the Prime Minister's Office said in a statement.

Earlier Monday, a newspaper affiliated with Hamas reported that sealing the deal on the release of the kidnapped soldier hinges on one prisoner, whose release is still being negotiated by the two sides.

Al Risala newspaper reported that negotiations have reached a very advanced stage, but did not publish the name of the said prisoner.

The Shalit family made last efforts to press the government before a final decision is made. Aviva and Noam Shalit met Monday morning with Hagai Hadas, the main negotiator for their captured soldier son, Gilad.

The meeting, which was held at Tel Aviv's Kirya military base, lasted about two hours. Reporters wishing to speak with the family prior to the meeting were told by Noam Shalit that "now is not the time to talk."

Ali Waked and Reuters contributed to the report