A report in the Arab press Saturday said that Foreign Ministry official Ofer Dekel, working on behalf of the Prime Minister's Office, has made "significant progress" in negotiations with Hizbullah terrorists for the release of IDF soldiers Eldad Regev and Ehud Goldwasser, held by Hizbullah in Lebanon. Hizbullah has presented its demands for the soldiers' freedom, specifically demanding the release of arch-terorrist Samir Kuntar, in prison for killing four Israelis in 1979. The demand for Kuntar has been made before, and Israel has thus far refused to release him.

Earlier reports said that Dekel had met with Hamas terrorists seeking a deal on kidnapped IDF soldier Gilad Shalit. Israeli officials did not confirm that report. Sources in the defense establishment said that it was possible that the reports indicated that a "mega-exchange" was in the works, in which massive numbers of terrorists would be released in exchange for Shalit, Regev and Goldwasser.