The Prime Minister's Office on Friday denied claims of progress in negotiations to secure the release of captured IDF soldier Gilad Schalit. It comes after a senior Palestinian official told Hizbullah's Al-Manar TV station that "great progress" had been made in prisoner swap talks. The official also told Al-Manar that an Egyptian mediator arrived in Israel on Tuesday to hold talks with to Israeli officials, including senior negotiators Amos Gilad and Ofer Dekel. It also follows a report in the London-based newspaper al Hayat that Israel and Hamas were showing greater flexibility in their efforts to reach a deal and that the terror group would now agree to some of the released prisoners being deported rather than sent back to their homes as long as Israel frees the 450 inmates it was demanding. PMO officials said that contrary to the claims, Jerusalem was still waiting for Hamas to back down with regards to 125 prisoners Israel was refusing to free, and was expecting the group to give a new prisoner list to the Egyptian mediators. Referring to the media reports, the Campaign to Free Gilad Schalit released a statement saying: "We have no knowledge of any progress in the negotiations. In a meeting last night about the continuation of the struggle, it was decided that at this stage, there would not be any additional activities, on the assumption that the issue is being dealt with properly in the current government' final days." On Thursday night, a Palestinian official told Reuters that Israel had given Hamas a revised list of Palestinian prisoners it was willing to release in exchange for Schalit. The official was quoted by the news agency as saying that according to the list relayed to the Islamic group via the Egyptian mediators, Israel was now "ready to release three top Hamas leaders who they had previously refused to free." However, the Palestinian official went on to say that there was still "a big gap between what Israel has offered and what Hamas wants." Earlier Thursday, an Egyptian government official confirmed his country was still mediating talks between Israel and Hamas on the prisoner swap. Both Israel and Hamas said earlier this week that talks aimed at freeing Schalit in exchange for hundreds of Palestinian prisoners were not over, despite the public breakdown last week of the Egyptian-mediated talks. However, there had not been any word until Thursday that contacts had been revived with some momentum. Prime Minister Ehud Olmert said last week that excessive demands by Hamas prevented a deal and indicated he would turn the matter over to his successor, Prime Minister-designate Binyamin Netanyahu, who is expected to be sworn in next week. Later, Olmert's spokesman Mark Regev said attempts to win the release of Schalit had not stopped. The 22-year-old has been held by Hamas in Gaza since June 2006. At a ceremony marking Schalit's 1,000th day in captivity on Saturday, the soldier's father, Noam, implored Olmert to use his remaining time in office to pursue his son's release. Olmert had offered to free 320 prisoners of the 450 Hamas was demanding. The Islamic group's Syria-based deputy leader, Mousa Abu Marzouk, said on Monday that Israel was trying to change the list of prisoners and wanted to expel some of them from the Palestinian territories. It was unclear what compromises the two sides might be prepared to make in the renewed efforts. The government official from Egypt's Interior Ministry who confirmed Thursday's contacts spoke on condition of anonymity because he was not authorized to talk to the media. He gave no other details. "Schalit will not see the light of day until our prisoners see it," a Syria-based Hamas leader, Ali Baraka, said on Wednesday, according to Hamas' Web site. "There are ongoing communications and discussions conducted by the Egyptian mediators which have not been cut off and we hope that the Israelis will respond to our requests," he said.