REPORT: SHALIT TO BE TRADED FOR PALI PRISONERS?

Israeli soldier-swap deal reached: paper
MANAMA (Reuters) - Israel and the Palestinians have reached an agreement to swap the Israeli soldier held hostage in Gaza with imprisoned Palestinians, Palestinian President Mahmoud Abbas was quoted on Tuesday as saying. Abbas told Bahrain's Akhbar al-Khaleej newspaper soldier Gilad Shalit would first be handed over to Egypt.

"An agreement has been reached about exchanging prisoners that is based on Egypt taking the soldier as a deposit, and after that the number of Palestinian prisoners-of-war would be announced," Abbas said in the interview. Israeli media quoted Israeli officials as saying they "know nothing of such a breakthrough".

Abbas confirms deal on Shalit (JPost)
Palestinian Authority Chairman Mahmoud Abbas confirmed Tuesday that a deal had been reached to secure the release of kidnapped IDF soldier Cpl. Gilad Shalit. Abbas told Bahrain-based newspaper El-Halij that Shalit would be transferred to Egypt and held there until Israel fulfilled its part of the bargain.

Earlier, Channel 2 News reported that the kidnappers had promised to release news of the soldier's welfare by Wednesday. The announcement came after the Egyptian newspaper Al-Hayat reported that Shalit had already been transferred to Egypt as part of a deal to secure his release.

The Jerusalem Post was first to report on Friday that two officers from Egyptian intelligence were stationed in the Gaza Strip and were said to be in touch with the actual kidnappers, who had passed on to them their demands. The Post reported that Israel was holding up the deal, and Egypt was waiting for Prime Minister Ehud Olmert's response.

According to Al-Hayat, Shalit was handed over to Egypt "a short time ago" in exchange for Israel's guarantee to release 800 Palestinian prisoners in three stages. Gilad's father Noam Shalit denied the report, saying unequivocally that Gilad was not in Egypt.

Israel Radio reported that Hamas had retracted its demand that Shalit be freed simultaneously with the Palestinian prisoners. Al-Hayat said that Israel had stipulated that no prisoners with blood on their hands, as well as Tanzim leader Marwan Barghouti and Ahmad Sadat, the PFLP head involved in the murder of former tourism minister Rehavam Ze'evi, should be freed as part of the deal. Channel 10 News reported that Hamas had agreed to Israel's conditions.