Quoting Palestinian sources in Cairo, 'Israeli' daily Haaretz said on Friday that 'Israel' has agreed to free all 450 of the detainees demanded by Hamas in exchange for captured 'Israeli' occupation soldier Gilad Shalit, and the dispute now revolves around 'Israel's' demand that some of these detainees be deported rather than returned home.

Ofer Dekel, 'Israel's' lead negotiator on the issue, was in Cairo Thursday for further talks with Egyptian mediators.

According to the sources, 'Israel' is insisting that several dozen of the released detainees be exiled abroad and that others be released to Gaza rather than the occupied West Bank. However, Hamas has thus far agreed to the deportation of only a handful of detainees, and has conditioned even this on the consent of the prisoners to be deported. It also opposes releasing detainees to Gaza rather than the West Bank.

Though Hamas officials are concerned that a deal might be harder to strike once a new 'Israeli' government takes office, they insist that they will not agree to any further compromises. Senior Hamas official Mahmoud Al-Zahar even denied Thursday that talks were taking place at all and said 'Israeli' reports of progress are false.

"Hamas isn't talking with anyone about a prisoner exchange for Shalit," he told the Nazareth-based newspaper Kul al-Arab by telephone from Cairo. "If anyone's holding negotiations, it isn't us."

Abu Obeida, a spokesman for Hamas' military wing, also denied reports of progress in the talks. "It's a lie," he told Kul al-Arab. "The talks with Egypt on the matter are currently frozen."

OFER DEKEL LEAVING CAIRO
Meanwhile, Ofer Dekel, 'Israeli' Prime Minister Ehud Olmert's special envoy in the negotiations to free Shalit, left Cairo late Thursday night after taking part in a round of Egyptian-mediated talks with Hamas, sources involved in the talks told AFP.

The sources were quoted as saying that perhaps "there is a glimmer of hope."

The three involved in the talks, 'Israel', Egypt and Hamas, are determined to push forward with the negotiations. Dekel has been keeping Olmert abreast of any developments, and the envoy consults with the 'Israeli' prime minister on Hamas' demands.

At this point none of the advisors involved in the indirect talks with Hamas have been sent to Cairo, including Shin Bet Chief Yuval Diskin, head of the 'Israeli' War Ministry's Diplomatic-Security Bureau Amos Gilad or Olmert's top diplomatic advisor, Shalom Turgeman.

The 'Israeli' Prime Minister's Office has been seeking to keep expectations to a minimum from the Cairo talks, with developments being kept quiet. At present time however, cabinet ministers have yet to be summoned to a meeting of the Ministerial Committee on National Security, which would be required to authorize any deal, should one materialize.