Negotiations with Hamas for the release of kidnapped IDF soldier St.-Sgt. Gilad Schalit will start at "square one" under the direction of the government's new envoy, who will likely be Intelligence Affairs Minister Dan Meridor, a defense official said Tuesday. Predictions in Israel are that the talks will not start from where they were left off by the Olmert government. "We will likely have to start brand new talks from square one," said an official familiar with the issue. "Hamas will want to get as much as it can out of the negotiations and will therefore go back to its original demands." Negotiations between Israel and Hamas broke down in March after then-prime minister Ehud Olmert accused Hamas of reneging on previous understandings. Hamas's demands include the release of some 1,000 prisoners, including 450 described as terrorists with blood on their hands. On Saturday night, Prime Minister Binyamin Netanyahu asked Meridor to take charge of the Schalit dossier in place of former deputy Shin Bet (Israel Security Agency) chief Ofer Dekel, who served in the position in the Olmert government. Meridor, who is in London for talks with American officials, is expected to give his answer by the end of the week. In an effort to advance the Schalit talks, Egyptian Intelligence Minister Omar Suleiman is considering deploying an Egyptian delegation in the Gaza Strip to serve as a direct intermediary between Israel and Hamas. An Egyptian defense delegation used to maintain a permanent presence in Gaza until Hamas's violent takeover in the summer of 2007. The delegation will also serve in an oversight capacity to monitor an agreement between Hamas and Fatah if one is reached. Unity talks recently ended in Cairo without an agreement. In related news, officials said there was growing tension between the Defense Ministry and Prime Minister's Office regarding who in the new government would oversee defense relations with Egypt. For the past few years, the point man for talks with Egypt was Maj.-Gen. (res.) Amos Gilad, head of the Defense Ministry's Diplomatic-Security Bureau. Gilad headed the talks that led to the cease-fire with Hamas last summer and held negotiations to renew the truce ahead of Operation Cast Lead in late December. Officials said Uzi Arad, the newly-appointed head of the National Security Council, had been working to sideline the Defense Ministry's involvement in the talks and to transfer responsibility for defense relations with Egypt to the NSC.