Sources in Egypt have told The Media Line news agency that Israeli and Hamas delegations are expected to hold separate talks next week with the Egyptian intelligence officials brokering negotiations between the parties. The planned talks are described as an attempt to initiate an "intensive" dialogue that will result in a prisoner exchange.

The sources cautioned that the negotiations may nevertheless be postponed by Hamas until Israel agrees to preconditions it has set. These include the strengthening of the 'calm' agreement in the Gaza Strip; the opening of the borders between Gaza and Israel; and Israel's acceptance of the list of prisoners that Hamas submitted to the Israelis a few months ago.  

If the two sides do agree to begin the talks, the delegations will meet in an undisclosed site in Egypt. Each delegation will comprise three men, the sources revealed. The Hamas team is expected to be headed by Mahmoud A-Zahhar; Israel's team by Gen. Ofer Dekel; and Egypt's team by Maj.-Gen. Muhammad Ibrahim.  

Israel primary interest is the release of Gilad Shalit, a soldier who was kidnapped in a cross-border raid and taken to Gaza two years ago. Shalit's army comrades have just completed their mandatory service, and upon being discharged from the army vowed to continue to work for Shalit's release.  

In return for releasing their captive, Hamas is demanding that 350 prisoners, many of whom participated in suicide bombings and other terrorist acts that drew Israeli blood, be set free. Israel has so far agreed to release 71 of the prisoners on that list. Most prominent among them is Marwan Barghouthi,  Fatah's former secretary-general in the West Bank, who is serving five consecutive life sentences for murders for which his Tanzim faction was found responsible.  

Other names on the list that are particularly problematic for Israel are include prominent Among the names in Hamas' list are murderers, 'Abdallah Barghouthi, Ibrahim Hamid and Hasan Salameh, all of whom were found to be responsible for "mega-attacks." Israel has so far vetoed any discussion regarding the possibility of their release.  

Palestinian Authority Chairman Mahmoud 'Abbas is expected to visit Cairo on Saturday, ahead of the arrivals of the Israeli and Hamas delegations. He will hold talks with Egyptian President Hosni Mubarak concerning the proposed deal.    

Hamas claims it has learned its lesion from last week's lopsided prisoner swap between Israel and Hizbullah, in which Israel received the bodies of two kidnapped soldiers in exchange for the release of five jailed terrorists and the bodies of almost 200 terrorists and infiltrators who died while attempting to carry out attacks on Israeli soil. The sources revealed to The Media Line that Hamas has informed the Egyptians that it will "show no flexibility" on the matter of its prisoner list.  

"They [Hamas] are saying that Israel paid Hizbullah a high price in return for two bodies and that Israel should therefore be ready to pay a [much] higher price in return for a living soldier," the sources said.  

A high ranking Hamas official disclosed to The Media Line that immediately following Israel's swap deal with Hizbullah, many European countries, including France, Britain, Germany and Italy, offered Hamas to broker an agreement with Israel.

"We do not close any door and any help is appreciated, but we told the Europeans that any agreement reached should be declared under the umbrella of our brothers the Egyptians because they are the ones who began this process from the early beginning," the Hamas official added.  

The source said that the Egyptians were angered to hear that Hamas might give the Shalit file to another mediator.  

Meanwhile, Fatah leaders are worried that credit for the release of Marwan Barghouthi, who is seen as a possible successor to 'Abbas, will further raise Hamas' popularity. In order to deny Hamas the achievement, Fatah has asked Israel to release Barghouthi separately as a gesture to 'Abbas and not as part of a prisoner exchange with Hamas.  

Fatah leaders are angered by Israel's concessions to Hizbullah and Hamas. According to the minutes of a recent meeting seen by The Media Line, Hisham 'Abd A-Raziq, a top Palestinian negotiator from Fatah, accused Israeli negotiators of "saying it wants to boost 'Abbas, but in fact by releasing big prisoners [as part of swap deals] with Hamas and Hizbullah… Israel is simply destroying our credibility in the Palestinian street and is boosting Hamas.”  

An official P.A. source told The Media Line the 'Abbas has asked Israeli Prime Minister Ehud Olmert and Israeli Foreign Minister Tzipi Livni to release Palestinian prisoners ahead of the possible deal with Hamas. The source characterized the responses by Olmert and Livni as "positive".  

'Abbas and Olmert are scheduled to meet again during the first week of August.  

"We will be waiting to hear Olmert's plans in this regard," the official said.