After days of fervent meetings of senior ministers, Israel's response to a prisoner exchange deal which would secure the release of captive soldier Gilad Shalit is "Yes, but…".

Israel gave a positive response to the general outline of the deal presented by the German mediator last week. The condition placed by Israel in its response refers to the names of "heavy prisoners" Israel demands are expelled to Gaza or abroad. According to Israel, these prisoners will not be allowed to return to the West Bank.

This stance, which is backed by a number of ministers and the head of the Shin Bet, stems from a serious concern that these "heavy prisoners" may revive Hamas' terror infrastructure in the West Bank and resume the armed conflict as well as terror attacks against Israeli citizens, settlers and the Palestinian Authority.

The response which was transferred to the German mediator gives him enough pull to continue pushing to close the gaps between Hamas and Israel on the matter of expelling prisoners to Gaza.

In response to reports of Israel's decision, a Hamas source told Ynet on Tuesday that the latest Israeli move may hold up the entire process for some time.

The source said Hamas had been expecting an "Israeli ploy" in which conditions would be stipulated in the last minute. The source said, "We are still waiting to receive the official Israeli decision, but as we have said, for the deal to go through, Israel must accept all of our demands.

"If this condition is not met and the number of deportees reduced to near zero, there will be no deal," the Hamas source said.

However, Hamas is unlikely to drop out of negotiations, as it also has much interest in the execution of the deal. The moment of truth has yet to arrive, but can be expected in the near future.

The real moment of truth will be when Prime Minister Benjamin Netanyahu decides to convene the security cabinet which serves as the legal and official government decision making forum on all matters pertaining to security.

The matter may also be brought before the cabinet for a decision. As long as no cabinet meeting or Knesset plenum has been convened to discuss the Shalit matter, talks will continue.

Shimshon Libman, head of the free Shalit campaign told Ynet Tuesday morning that he heard about the ministers' decision in an SMS issued by the Prime Minister's Office Monday night, but that he had not received any updates on details of the decision.

Libman added, "The notification of the continuation of talks points to two main issues, one is that the rules have not been broken. There were rumors that the Hamas proposal was rejected, but they proved to be false. The second point is that they gave (envoy) Hagai Hadas an offer and told him – 'take it and go to the German mediator'. If Hadas did not think this was a serious decision that has a chance, he would not have done it."

Gilad Shalit was kidnapped into the Gaza Strip 1,276 days ago

Ali Waked and Attila Somfalvi contributed to this report