Talks between Israel and Hamas on a prisoner swap involving captive Israel Defense Forces soldier Gilad Shalit will resume soon, Egyptian sources told the pan-Arab daily Al Hayyat.

Shalit was captured by Gaza militants in a cross-border raid in June 2006, and has not been heard from since. Hamas have demanded the release of hundreds of Palestinian prisoners in exchange for Shalit's freedom.

The source said the issue of the prisoner swap topped the agenda during recent consultations in Cairo between the head of the diplomatic-security bureau in the Defense Ministry, Amos Gilad, and Egyptian intelligence chief Omar Suleiman.

Gilad returned to Israel on Friday despite an earlier announcement that he was to remain in Cairo for a few more days, Israel Radio reported.

According to Israel Radio, Noam Shalit, the father of the abducted IDF soldier, met on Friday with Hagai Hadas, who was appointed by Prime Minister Benjamin Netanyahu to oversee the negotiations with Hamas.

Hadas, the former Mossad official, has been the subject of intense media interest after his name was linked to a bio-medical company which recently claimed to have sold a revolutionary patent that warns of heart attacks. The veracity of the claim has been called into question.

Following the meeting with Noam Shalit, Hadas said the prisoner swap talks are his top priority.

Egyptian President Hosni Mubarak accused Israel on Thursday of sabotaging at the last minute a deal that would have seen Shalit freed from Hamas captivity in exchange for the release of Palestinian prisoners held in Israel.

Israel Radio quoted Mubarak as saying that Israeli negotiators added new conditions just as the deal was about to be clinched. Mubarak maintained that Hamas was ready to transfer Shalit to Egypt, but then Israel began changing its terms, saying that it was willing to release some prisoners but not others, and the deal fell through.

Senior Israeli officials said that of the 450 Palestinian prisoners whose release Hamas has demanded, Israel has refused to release 125, and asked Hamas to formulate an alternate list, Israel Radio reported. According to these officials, it was Hamas' failure to submit a new list that scuttled the deal.

Earlier this week, Mubarak told President Shimon Peres, who was visiting Cairo, that Shalit was in good health, and he voiced hope that he would be freed soon.

Meanwhile Thursday, the Group of Eight leading industrialized nations called for Shalit's immediate release and for the opening of the Gaza crossings to allow humanitarian aid, goods and people into the Hamas-controlled enclave.