Israel has agreed to free arch-terrorist Marwan Barghouti and Popular Front leader Ahmed Saadat among the hundreds of security prisoners to be released for abducted Israeli soldier Gilad Shalit, according to a Tuesday report by the London-based Arabic newspaper Al-Hayat. Deputy Prime Minister Silvan Shalom said earlier that the two were not on the list. Barghouti is serving five life sentences for his role in the terror murder of Israelis and Saadat is being held as the leader of the group that assassinated Tourism Minister Rechavam Ze'evi in 2001.

Hamas sources quoted by the newspaper said fate of the exchange will be determined during the next two days. They added that they would not make any concessions or sign an agreement before all their demands are met. While they said unprecedented progress had begun in the negotiations, not everything has been worked out.