Egyptian Intelligence chief Omar Suleiman was unable during his visit to Tel Aviv on Wednesday to bridge the gaps between Israel and the Palestinians regarding the identity or number of prisoners to be released for captured Cpl. Gilad Shalit or the timing of a swap, according to both Israeli and Palestinian sources. Suleiman, however, sounded an optimistic note after talks with National Infrastructures Minister Binyamin Ben-Eliezer on Wednesday night. "The affair will reach its conclusion very soon," he told reporters.
Comment: Think like an Egyptian
Senior official: No more steps until Shalit returned
In an sign that a deal might be in the offing, Israel released Palestinian Authority Public Works Minister Abdel Rahman Zeidan of Hamas from a prison in Tulkarm on Wednesday night, Palestinian sources reported.
Relatives were quoted as saying that Israeli authorities had failed to find evidence that he was involved in violence.
Zeidan was arrested on November 3, joining dozens of Hamas political leaders rounded up by the IDF after Shalit's abduction on June 25.
There was no immediate comment from the army.
Prime Minister Ehud Olmert said after meeting with Suleiman that he was "very satisfied" with the talks. However a senior Israeli official said the talks had not brought the release of the soldier any closer.
Government sources said Hamas was demanding the release of "Hamas murderers who killed Israelis," something that Olmert opposes, despite saying at Sde Boker on Monday that he was willing to release Palestinian prisoners serving long sentences.
The issue of Shalit's release, as well as the fragile cease-fire in Gaza and Palestinian efforts to form a unity government, were expected to dominate separate talks US Secretary of State Condoleezza Rice was scheduled to hold with PA Chairman Mahmoud Abbas in Jericho on Thursday, and later that day with Olmert in Jerusalem.
Rice arrived in Amman on Wednesday to participate in a conference and in meetings that US President George W. Bush will hold Thursday with Iraqi Prime Minister Nouri al-Maliki.
Israeli government sources said Suleiman did not bring any concrete offer concerning Shalit from Damascus-based Hamas head Khaled Mashaal, whom he met last week in Cairo.
According to the sources, Suleiman's visit reflected movement on the Shalit issue, "but no progress."
"At the end of the day, the difference is over numbers, but also over the 'quality' of the prisoners," the sources said. "They want Hamas prisoners with blood on their hands released."
There was also the issue of how the prisoners would be released, and to whom, the sources said. One official said Olmert was adamant that a way be found to ensure that the prisoners were not released to Hamas's hands so that Hamas's standing would not be strengthened by the prisoner release.
Suleiman also met separately with Defense Minister Amir Peretz, Foreign Minister Tzipi Livni and Ben-Eliezer.
Defense Ministry officials said Suleiman told Peretz that Hamas had asked for the release of 1,400 prisoners. Figures given by Israeli officials on how many security prisoners they are willing to release range from "less than 300" to 600.
According to Defense Ministry officials, the talks have stalled over a disagreement regarding the order of the release - Israel wants Shalit released before it releases prisoners, while Hamas has made clear it will only release the kidnapped soldier after the Palestinian prisoners are released.
PA officials in Ramallah, meanwhile, said the talks over Shalit were stuck because of Hamas's fear that Israel will not keep its part of a prisoner-swap deal.
Hamas, the sources said, wanted Israel to first release several hundred prisoners, especially minors and women, as a goodwill gesture.
According to these officials, Palestinians want the Shalit release to take place at the same time that hundreds of additional prisoners are let go.
"It's a matter of confidence," said one official. "Hamas wants assurances that Israel will fulfill its commitments under the terms of a prisoner exchange. On the other hand, Israel has informed the Egyptian mediators that it will not release any prisoner before Shalit is returned home."
While the Shalit issue was a major focus of the meetings with Suleiman, government officials said a great deal of time was also spent discussing the arms smuggling from Egypt into Gaza.
Peretz urged Suleiman to step up Egyptian efforts to stop the smuggling, but, according to Defense Ministry sources, the two men did not discuss an increase in the number of Egyptian soldiers stationed along the Sinai-Gaza border.
Israel is reluctant to open up the Camp David Accords and allow the deployment of more Egyptian soldiers to the area, and - according to security officials - believes the Egyptians could do a much better job with the forces already there.
Suleiman told Peretz that Egypt would continue mediating between Israel and the Palestinians concerning Shalit and the establishment of a Palestinian national unity government.
Suleiman, officials said, was not overly optimistic regarding the stability of the Gaza cease-fire and urged Peretz to demonstrate restraint in face of Palestinian violations. "He asked us to give the cease-fire a chance," Defense officials said.
Peretz told Suleiman that Israel would demonstrate restraint "up to a certain point."
The Egyptians are in the middle of replacing their military representatives in the Gaza Strip. They have been stationed there since before disengagement and are charged with coordinating security and diplomatic issues between Israel and the PA.
While the change in representation has been cited as a standard reshuffle within the Egyptian military - the new representative is Gen. Birhan Hamed - security officials said his predecessors had failed to "provide the goods" when it came to the establishment of a PA national unity government and the release of Shalit.
Regarding Rice's visit, sources close to Abbas said he would tell Rice that his efforts to form a unity government with Hamas had failed and that he might soon be obliged to take "dramatic" measures that could include dismissing the Hamas-led government and calling early elections.
He is also expected to brief her on his efforts to preserve the cease-fire and to bring about Shalit's release. The sources added that Abbas would also demand that the US pressure Israel to extend the cease-fire to the West Bank and to release hundreds of Palestinian prisoners as a goodwill gesture.
PLO executive committee member Yasser Abed Rabbo, who is expected to participate in the talks with Rice, said the Palestinians would tell her that they were prepared to resume peace talks with Israel without condition. He also said the Palestinians would ask Washington to support an international conference for peace in the Middle East.
Sources in Olmert's office said that State Department officials had only informed them on Wednesday of Rice's desire for a meeting. Olmert met with her just over two weeks ago in Washington. Rice is also scheduled to meet with Livni.
AP contributed to this report.