Egyptian Foreign Minister Ahmed Abul Gheit accused Israel on Sunday of stalling on a prisoner swap with Hamas for a captured Israeli soldier by refusing to free certain Palestinian prisoners.

"Israel is still placing obstacles toward releasing all those demanded by the Palestinians," said Abul Gheit, according to a statement released by the foreign ministry.

"We hope that the Israeli side, which decided to achieve this exchange, will go through with it and not place further obstacles," he said.

Israel and the Islamist Hamas have held indirect talks sponsored by Egypt and mediated by Germany to finalise a swap which would see the release of Israeli soldier Gilad Shalit in exchange for hundreds of Palestinian prisoners held by Israel.

Both Israel and Hamas reported progress last month in the negotiations, which have dragged on since Shalit was captured in a cross-border raid from the Gaza Strip three years ago.

But both sides downplayed reports of an imminent deal after the secretive negotiations snagged over a group of militants Israel said it would not release.

Israeli MP Daniel Ben Simon said on Saturday that prisoner swap deal could go ahead in the next "week or two."

On Saturday, Egypt's state-run MENA news agency quoting Abul Gheit as saying that Israel should not "exaggerate its demands."

According to Arab media, negotiations have stalled over Israel's refusal to free Arab-Israeli prisoners or Hamas members responsible for particularly deadly attacks and its insistence on expelling some of the released prisoners.

The prisoners under dispute include popular Palestinian leader Marwan Barghuti, who is seen as a possible successor to president Mahmud Abbas.

Ultra-nationalist Israeli Foreign Minister Avigdor Lieberman has vowed Barghuti would remain in jail.

Also on Sunday, the pan-Arab daily Al-Hayat reported that a team of four French doctors entered Gaza a week ago and and performed medical check-ups on Shalit.

An Egyptian security official confirmed to AFP that three French doctors went into the enclave through the Egyptian border crossing of Rafah but there was no indication that they treated Shalit.