Fears mounted in Israel on Monday that Hamas would toughen its stance in the negotiations for the release of kidnapped soldier St.-Sgt. Gilad Schalit in response to the cabinet's decision a day earlier to release murderer Samir Kuntar in exchange for reservists Eldad Regev and Ehud Goldwasser, who were abducted by Hizbullah. These fears seemed justified as Hamas leader Mahmoud Zahar said on Monday that Israel's decision to free Kuntar and other Lebanese prisoners in the context of a prisoner exchange with Hizbullah would pave the way for the release of hundreds of Palestinian prisoners "with blood on their hands." Regev and Goldwasser are believed to be dead, and as a result officials warned that Hamas might decide to increase its previous demand of 450 prisoners since Schalit is alive and Israel might be willing to pay more. "They want to take advantage of the deal with Hizbullah," a defense official explained. "They see what price we are willing to pay for bodies and think they can now get more for Schalit, who is alive." "Something important has happened, and there's no ignoring the fact that it [the cabinet decision] is a major development. Israel has agreed to release prisoners who it says have blood on their hands. We must therefore seize the opportunity and seek the release of our prisoners," Zahar said. "There should be no difference between the case of Schalit and the case of Kuntar." Hamas and other Palestinian armed factions in the Gaza Strip expressed hope that the decision to free Kuntar signaled a change in Israel's policy of not releasing prisoners who were involved in killings. They see the decision as a "big victory" for Hizbullah because Israel was eventually forced to succumb to the organization's demands. Abu Mujahed, spokesman for the Popular Resistance Committees, an alliance of various armed groups in the Gaza Strip, said Monday that his group was now hopeful that Israel would release Palestinian prisoners serving lengthy sentences for their role in fatal terror attacks. The Popular Resistance Committees was one of the groups that claimed responsibility for Schalit's abduction two years ago. "The Zionist enemy must learn the lesson," Abu Mujahed said. "If they want to see the soldier again, they must accept all our demands as they did with Hizbullah. We continue to insist that they release prisoners serving lengthy sentences, in addition to women and minors." He expressed confidence that the release of Kuntar would be the first step toward releasing hundreds of Palestinian prisoners. "The Lebanese resistance has triumphed," he added. "Soon our imprisoned heroes will be freed." In a related development, Egypt has summoned Hamas representatives to Cairo next week for talks on a prisoner exchange with Israel, an Egyptian diplomat said Monday. The diplomat said the two sides would also discuss ways of resolving the ongoing dispute between Hamas and Fatah and the current cease-fire in the Gaza Strip. "Egypt has decided to focus its efforts on solving the case of Gilad Schalit," the diplomat told The Jerusalem Post. "As of next week, we will hold intensive talks in Cairo with all the concerned parties until we reach an agreement over a prisoner deal." Zahar confirmed that his movement had received an invitation from the Egyptians to dispatch a delegation to Cairo for talks on Schalit. He said the talks would start as early as next week and would also deal with Hamas's demand to reopen the Rafah border crossing and release Hamas prisoners from Egyptian jails. Israeli officials also said it was likely that Ofer Dekel, Israel's negotiator on the captives issue, would travel to Cairo to participate in the talks. Meanwhile, senior defense officials revealed on Monday that according to recent intelligence information, Hamas was taking military action in Gaza to prevent breaches of the cease-fire. The information came even as a Kassam rocket landed in the Sha'ar Hanegev Regional Council area, causing no casualties or damage. The officials said Hamas forces were being deployed in open fields frequently used in the past by rocket and mortar squads and have even arrested several terror operatives affiliated with the Islamic Jihad. "They are taking action on the ground, and this is indicative of how important the cease-fire is for them," one official said. "They know that if they don't rein in the other factions, Israel will not keep its part of the deal, either." Commenting on the prisoner swap, Prime Minister Ehud Olmert said that its approval was justified, despite negative consequences, because it would bring the captive soldiers home and would help catalyze similar indirect negotiations with Hamas over the return of Schalit. "I stand behind this decision with all of my strength and all of my faith," said Olmert of the exchange with Hizbullah. "Alongside that, we continue to concern ourselves, with all of our strength and all of our courage, with the return of Gilad Schalit. That is also not a simple story, and it won't be an easy decision. We need to remember that." According to the terms of the Hizbullah exchange, Israel will release Kuntar, along with four other Hizbullah fighters, an undetermined number of Palestinian prisoners, dozens of Hizbullah and Palestinian bodies, and information on the disappearance in Beirut in 1982 of four Iranian diplomats, in exchange for Goldwasser and Regev and a Hizbullah report on the fate of missing navigator Ron Arad. Dekel, who negotiated the deal through German mediator Gerhard Konrad, is scheduled to head to Berlin later this week to sign the agreement, officials said Monday. Konrad will then take the agreement to Beirut to obtain a Hizbullah signature. Defense officials said it was likely that the swap would take place in the next two weeks, although a final date had yet to be set. Following the signing of the agreement, Hizbullah is set to deliver its report on Arad, and Israel is to give its information on the fate of the Iranian diplomats, believed to have been killed by Christian Phalangists during Israel's invasion of Beirut in 1982. If Konrad determines that the report on Arad lives up to acceptable standards, and Israel concurs, the prisoner swap will take place. Defense officials said the swap would take place at the Rosh Hanikra border crossing with Lebanon and not in Germany, the site of the previous swap with Hizbullah in 2004. "Today there is a strong UNIFIL that can facilitate the swap at the border," a senior defense official said, adding that under the assumption that Goldwasser and Regev were dead, forensic teams would first test the bodies' DNA to confirm their identity before completing the swap. Olmert, speaking to the Kadima faction, said that his primary reason for making the deal was to bring the soldiers back to Israel while he still had the ability to do so. "I did it even though I knew criticism would be voiced and that it would be controversial in Israeli society, but I did it because I want the boys home and I wanted to release their families from this continuing and unrelenting torture," Olmert said regarding his approval of the exchange. "In no way can I say that this was a good decision. This isn't a good issue; this is a painful issue." Although he stood by the decision, Olmert recognized the drawbacks of the deal, saying that the return of Kuntar meant that Hizbullah had achieved the original objective of the kidnappings. "I cannot forget the fact that the actions of Hizbullah on July 12, 2006 that led to the kidnapping of our two soldiers and the killing of eight others, and what turned into the second Lebanon War, began with the intention of kidnapping people to get Samir Kuntar [back]," Olmert said. "It's not that Samir Kuntar is important, but that the circumstances surrounding this decision would create that reality." Olmert chided the media for making it seem that no progress had been made in the negotiations until recently. "You tried to create an impression in the public [sphere] that nothing was happening," Olmert said. "We had a need to manage this with sensitivity and intelligence, with a maximum understanding of all of the aspects of the systems we were dealing with." Olmert said he wanted to ensure that Goldwasser and Regev were brought home, regardless of whether they were alive or dead. He said it was clear that Israel needed to push for the decision as it was, or contact with Hizbullah would be cut off and there would be no possibility of bringing them home - or if they were dead, for burial in Israel. In completing the deal, Olmert said that the government was avoiding a repeat of what happened to Arad, who has been missing since 1986. "I didn't want these circumstances to create a situation, God forbid, similar to that of Ron Arad. After 20 years we don't know exactly what happened to him, even though we keep looking," Olmert said. Whatever the outcome of the exchange with Hizbullah, Olmert cautioned, Israel would encounter similar instances of captured prisoners and would have to stand strong in the face of those challenges. "You also know this isn't the end of the road, that we're facing tough decisions and similar situations in the future, of soldiers that are in the hands of their captors," Olmert said. "A state that can devote everything to the saving of one life has a moral strength that creates solidarity that none of these other states has." Herb Keinon contributed to this report.