According to a senior Palestinian Authority (PA) source quoted by the Saudi newspaper Okaz on Thursday, the Israeli government has largely agreed to free roughly 1,000 Hamas prisoners for the release of IDF St. Sgt. ­Gilad Shalit. The source told Voice of Israel government radio that Amos Gilad, head of the Defense Ministry's Diplomatic Security Bureau, travelled to Cairo last week to obtain assurances from Hamas that they would not demand more prisoners. Gilad called the report completely untrue, according to the station.

Shalit was captured in a cross-border raid near the Kerem Shalom crossing between Israel, Gaza and Egypt in the summer of 2006 and Hamas claims that he is still alive. Despite continued public pressure from Jews in Israel and around the world to free Shalit, the fate of the young Jewish soldier remains uncertain. Many oppose the release of terrorist prisoners and have called for the Israeli military to mount a rescue operation to free him.

The PA source said that Israel was prepared to release 450 of the prisoners that Hamas was demanding to be released upon the formation of a new Israeli government, along with 550 more that Israel will choose of its own accord.

An Israeli source close to the negotiations told the Israeli Ynet news service that Israel is prepared to be flexible in complying with the Hamas demands.

Meanwhile, a senior Israeli official criticized a demonstration, planned for Sunday, that will call for Shalit’s release. Deputy Defense Minister Matan Vilna'i  told the Jerusalem Post Wednesday that the demonstration will be detrimental, as it will send the message to Hamas that the Israeli government is under pressure to release terrorists.

"This demonstration demonstrates weakness,” said Vilna’i.  "If the government wasn't doing anything and had forgotten him [Schalit] I would say: hold demonstrations. But we haven't forgotten and we are acting all the time.  If they see we are pressured then [Hamas] will say, 'Why should we hurry?'"