Informed Egyptian sources have confirmed to Asharq Al-Awsat that significant progress has been made in the Israeli – Palestinian negotiations mediated by Egypt towards reaching a prisoner exchange agreement. These sources revealed that this progress is not dramatic, but that it has taken place as a result of the positive steps taken by Israeli Prime Minister Benjamin Netanyahu. The sources clarified that Netanyahu has agreed to resume negotiations with Hamas from the point that the previous negotiations undertaken by former Israeli Prime Minister Ehud Olmert had ended. The source stressed the positivity of this step to Asharq Al-Awsat.

The Olmert government had agreed with Hamas that the Palestinian group would draw up a list of 450 prominent prisoners (prisoners whose hands, according to Israel, are stained with Jewish blood) [to be exchanged for captured Israeli soldier Gilad Shalit]. Israel would then study this list and decide on its acceptability. Hamas chose the most controversial names, and after long months of negotiation, Israel agreed to release 325 prisoners from this list on the condition that these prisoners were not released into the West Bank, but rather were released either abroad or into the Gaza Strip. The Olmert government refused to release the remaining 125 prisoners, and instead asked Hamas to draw up a list of alternatives. However previous negotiations concluded at this point.

According to Israeli sources, after the Netanyahu government came to power Hamas agreed to deport a number of prisoners upon their release. Palestinian sources indicate that this approval came following a referendum amongst the prisoners themselves over this issue. This agreement came as part of an Egyptian proposal for a comprehensive deal not just limited to prisoner exchange, but also including a truce between Hamas and Israel, internal Palestinian reconciliation of the Palestinian territories, and the launch of peace negotiations between Israel and the Palestinian Authority.

The previous few weeks has seen widespread diplomatic activity between Egypt and Israel that culminated in Israeli Prime Minister Benjamin Netanyahu visiting Egypt following the high profile visit of Israeli President Shimon Peres last July. According to high-ranking Israeli sources, this period has seen a number of advances in the bilateral relations between the two countries, including cooperation on security issues, particularly after Egypt uncovered a sleeper cell with links to Al Qaeda and Hezbollah in its territory. This cell is suspected of making preparations to perform a series of attacks against Israeli and Egyptian interests in Sinai, and also assassinate numerous Egyptian [political] figures, as well Israeli ambassador to Egypt, Shalom Cohen.

It was also revealed that Israeli Prime Minister Netanyahu had telephoned Egyptian President Hosni Mubarak on Monday to thank him for thwarting the plans against the Israeli ambassador. The two leaders also talked about ways to remove obstacles to the implementation of a prisoner exchange deal and the development of bilateral relations. It was also revealed that the Chairman of the Israeli National Security Council and a senior adviser to Netanyahu, Dr. Uzi Arad, was in Cairo as head of an Israeli political and security delegation. Netanyahu's representative to Hamas with regards to the prisoner exchange deal, Hagai Hadas, was also on his way to the Egyptian capital.

The Israeli media has linked these visits to progress made in negotiation over the release of captured Israeli soldier Gilad Shalit. These visits took place in a positive atmosphere, despite the negative atmosphere that arose in Egypt as a result of the Israeli counter-terrorism unit issuing a warning against Israeli citizens traveling to Sinai, and calling for Israeli citizens currently present there to leave the region immediately. This was as a result of warnings that terrorist operations would target Israeli citizens in this region.

A spokesman for the Israeli government said yesterday that this warning caused anxiety in Egypt as the country considers this to be "Israeli overreaction attempting to provoke Egypt." However the spokesman added that these warnings are not new and are not limited to Egypt, and that similar warnings exist with regards to Israeli citizens visiting Jordan, Morocco, Tunisia, and other Arab and Muslim countries, as well as some regions of Turkey.