The German mediator brokering a prisoner swap between Israel and Hamas for Israeli soldier Gilad Shalit will begin a new round of talks next week, a source in the Palestinian Islamist group said Wednesday.

The comments came shortly after Hamas reportedly rejected the latest offer from Israel to free hundreds of Palestinian prisoners in return for its corporal, who has been held in the Hamas-ruled Gaza Strip for more than three years.

Al-Arabiya television network, relying on Hamas sources, has reported that the Hamas political leadership had decided to turn down the latest Israeli offer on a prisoner exchange.

Al-Arabiya said the leadership, under Damascus-based Khaled Meshal, came to the decision after 12 hours of deliberations following Israel's refusal to release several senior leaders as well as increasing the number of prisoners that Israel is seeking to exile upon their release. Hamas, however, is officially denying the television report.

The Al-Arabiya report said Hamas sources were claiming that the latest Israeli position reflects backtracking on what was agreed to previously. Hamas officials have stressed that the organization has no intention of agreeing to a mass expulsion of Palestinian prisoners, while Israel is demanding the exile of about 120 out of 450 prisoners to be freed.
Osama Hamdan, a Hamas leader abroad, said negotiations were still ongoing, adding in comments to the German news agency DPA that his organization is still in contact with the mediator.

Ayman Taha, the Hamas spokesman in Gaza, also reacted to the news reports saying that his organization has not yet come to a final decision on the Israeli offer, and other Hamas officials such as Mohammed Nasser also denied that Hamas had rejected Israel's offer.

In an earlier statement, Hamdan hinted at Hamas' intention to kidnap additional Israeli soldiers if Israel doesn't accept the group's demands. Al-Arabiya claims that a high-ranking Hamas political official was the source of the station's report. The source reportedly said consent to the Israeli proposal would ultimately damage Hamas' standing.

Two days ago, a delegation of three senior Hamas officials left for Egypt to discuss the Israeli position on a prisoner exchange. The head of the delegation, Mahmoud al-Zahar, said after meetings with Egyptian security officials that he and his delegation would continue their round of consultations with Hamas' political leadership, most notably by meeting Khaled Meshal in Syria.

Hamas is awaiting the return to the region of the German mediator, Gerhard Conrad, to give him the group's official response. It appears that Hamas will turn down the Israeli offer in the hope that Israel will reduce the number of prisoners who would be expelled and in an effort to have the list of those released include prisoners such as Fatah strongman Marwan Barghouti.

On Tuesday immediately following Prime Minister Benjamin Netanyahu's meeting in Cairo with Egyptian President Hosni Mubarak, Egypt?s foreign minister, Ahmed Aboul Gheit, said Egypt does not support the expulsion of prisoners or Israel?s refusal to release other prisoners.
The foreign minister was seen as trying to embarrass Hamas into rejecting the Israeli offer, which is not viewed favorably by the Egyptians because completion of the deal would strengthen Hamas.