Western diplomatic sources told al-Hayat newspaper that Israel agreed to release 443 of the 450 prisoners Hamas has demanded be freed in the first phase of a prisoner exchange deal for the release of captive soldier Gilad Shalit.

In addition, the sources said Israel has demanded that over 100 of the prisoners to be freed be banned from returning to the West Bank.

The sources said that the prisoners Israel refuses to release are: Former Fatah Secretary-General Marwan Barghouti, Secretary-General of the Popular Front for the Liberation of Palestine Ahmad Saadat, and Hamas military wing officials Ibrahim Hamed, Abdullah Barghouti, Abbas a-Sayyid, Jamal al-Hijja and Hassan Salameh.

Gaza sources believe that Hamas will give a positive response to the offer to be passed on by the German mediator if Israel agrees to release all 450 prisoners on the list, even if Israel insists on the deportation matter.

According to the Palestinian sources, Hamas will leave the decision on deportation up to the prisoners themselves, thus ridding the movement of the responsibility of making a decision in this matter, which may put the deal at risk.

On Tuesday, the Reuters news agency quoted a top Hamas official as saying the German mediator postponed his scheduled visit to Gaza because Israel wanted to modify its reply to Hamas' demands and asked him to postpone his meetings.

Hamas deputy chief Moussa Abu Marzouk refused to comment on his movement's stance on the deportation of prisoners. Abu Marzouk told al-Hayat, "We do not reject it, or accept it, it is part of the negotiations, and there are details to be discussed.

"Unprecedented progress has been made in talks run by the German mediator, but despite this, it seems it is not enough to complete the deal due to a dispute within the Israeli security establishment on Hamas' demands."

Despite the seemingly tight schedule, Abu Marzouk said he believes the German mediator will continue working on the deal throughout Christmas: "Due to the achievements he has reached during negotiations, he is interested in continuing to invest his efforts to ensure that the deal is signed, and both parties are also interested in completing it."

The Hamas movement on Tuesday accused Israel of "placing obstacles" in the way of the deal after it received Israel's response from the German mediator. Hamas officials stressed that the movement was "insisting on the list that was submitted."