The officials say Netanyahu may implement recommendations of a report written by former Justice Minister Daniel Friedmann, who said Israel should cancel some of the prisoners' benefits in order to gain leverage in talks for the release of kidnapped soldier Gilad Shalit.
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Though Friedmann's report was ratified by Israel, its recommendations were never implemented due to controversy over whether they would help or harm negotiations.
But with talks deadlocked and the soldier in captivity for some five years, the prime minister appeared to be reconsidering applying additional pressure on Hamas.
MK Danny Danon (Likud) has already proposed a bill on the matter, but the Cabinet opted not to back it. On Monday Netanyahu answered a query put forth by the Opposition on the bill by saying that despite having rejected it, the government may still decide to alter the prisoners' conditions.
Reports in Germany say that both Paris and Berlin offered the terror group benefits in exchange for the soldier's release, but that Hamas's military wing had rejected the offers. Israel said recently that there was "no progress" in talks.
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