IN A MEETING in Cairo yesterday Israeli president Shimon Peres and his Egyptian counterpart Hosni Mubarak discussed efforts to conclude a prisoner swap between Israel and Hamas, amid a flurry of Arab media reports that a deal was close.
Under the deal, Israel would free hundreds of Palestinian prisoners in return for Gilad Shalit, the Israeli soldier seized by militants on the Gaza border more than three years ago.
Egypt has mediated between the sides, and recently a German official travelled to the region to join in the contacts, in what is seen as an indication that the months of hard bargaining may be approaching the end game.
Israeli officials are keeping quiet but, according to reports in the Arab world, Israel will release about 450 detainees in the first stage of the deal, as early as this week, in return for Hamas transferring Gilad Shalit from Gaza to Egypt. In the second stage of the deal, Israel will free additional prisoners and the soldier will return home.
Hamas leaders from Gaza and abroad will reportedly meet in Cairo today to discuss the latest Israeli offer.
According to the unconfirmed reports, the final sticking point is over how many of the prisoners will be allowed to return to their homes in the West Bank and Gaza, and how many will be sent into exile abroad.
Another indication that a prisoner swap may be close was the weekend announcement by Hamas officials that agreement has been reached with the smaller factions in Gaza to stop rocket attacks against Israel.
Egyptian officials have pushed for a prisoner swap to be part of a comprehensive ceasefire agreement under which Israel will ease its harsh economic blockade on Gaza in return for an end to the cross-border militant rocket fire.
At the meeting President Mubarak also urged Israel to take “courageous decisions” and halt settlement activity in order to revive the peace process with the Palestinians. He warned that the future of Jerusalem was an issue for the entire Muslim world.
“I expressed my concern to President Peres that peace talks have not progressed since our last meeting in July and that Egypt is looking forward to an Israeli response, such as halting the building of settlements in east Jerusalem,” he said.
The Palestinian leadership has made a resumption of bilateral peace talks with Israel conditional on a total cessation of building in West Bank settlements and east Jerusalem. Last week, Israel approved plans for 900 new homes in the Jerusalem neighbourhood of Gilo, built on Arab land captured during the 1967 Arab-Israeli war.
The Israeli president repeated his call for the immediate resumption of peace talks with the Palestinians, describing settlements as a “marginal issue”.
“The minute we shall start to negotiate, there won’t be new settlements, there won’t be confiscation of land,” Mr Peres pledged .
“There will be no financial investment in new settlements. There will be a dismantling of the settlements that were established without authorisation.”
The Egyptian president made it clear that Cairo opposes the establishment of a Palestinian state in temporary borders – an idea floated recently by Mr Peres – saying that the time had come to conclude a just and lasting peace.
Despite the Hamas announcement of an agreement to end the rocket fire, a projectile landed in Israel on Saturday, close to the town of Sderot.
In response, Israeli aircraft targeted a smuggling tunnel on the border between Gaza and Egypt, and two weapon-manufacturing workshops, wounding seven Palestinians.