Arab press reports, echoed in Israel, claim that Gilad Schalit's long ordeal in Hamas captivity may be nearing its end, perhaps even this weekend to coincide with Id al-Adha, the Muslim holiday marking the end of the Haj. There are other hints something is afoot. Shimon Peres was in Cairo yesterday to see President Hosni Mubarak. Guido Westerwelle, the new German foreign minister, is here today to meet Prime Minister Binyamin Netanyahu. The Germans are acting as brokers between Hamas and Israel. Lastly, perhaps to stabilize conditions pending a prisoner exchange, Hamas said it had reached agreements with the other Gaza terror groups not to attack Israel without coordination. That news came after Kassams slammed into Sderot on Saturday. But the IAF's retaliation against weapons factories and a smuggling tunnel in Gaza prompted Hamas's own military wing to threaten further attacks. And Islamic Jihad denied it was party to any arrangement in the first place. Since the conclusion of Operation Cast Lead in January, 270 rockets and mortars have been lobbed at Israel from the Strip. WHEN IT comes to Schalit, it's hard to know where the spin ends and the news begins. According to the London-based Arabic newspaper Al-Hayat, Israel is poised to free hundreds upon hundreds of Palestinians in exchange for our young soldier. From the time he was taken in June 2006, Hamas has been holding firm to its demands that it will free Schalit only in exchange for 1,000 of its operatives held by Israel. The present haggling, Arab reports imply, is partly over whether, once at large, the masterminds of the Sbarro, Moment Cafe and Dolphinarium bloodbaths, and of the Netanya Pessah Seder massacre, will be required to seek asylum outside Gaza and the West Bank. Some reports have Israel refusing to release these men or east Jerusalem prisoners sought by Hamas. If true, that probably means no deal. Plainly, Netanyahu is loath to have his government approve a lop-sided prisoner exchange that requires setting free some of the most dangerous terrorists Israel has ever encountered. Yet he may be telling himself that any such deal would be the absolutely, positively, honest-to-goodness, very last time Israel capitulates to Hamas or Hizbullah. Hamas begs to differ. It's already offering a $1 million bounty to any Arab citizen of Israel who abducts another Israeli soldier. An ill-considered prisoner deal could also bring down Mahmoud Abbas's already tottering Palestinian Authority in the West Bank. That would set the stage for Hamas to fill the political vacuum. As it is, with Hamas breathing down his neck, Abbas is being more obstinate than ever, even hinting that he might pursue popular resistance instead of negotiations. Fatah "redeemer" Marwan Barghouti, incarcerated for orchestrating numerous murders, has put out the word that any future negotiations with Israel ought to be accompanied by terrorism. If Israel yields to Hamas, as an offset, Barghouti could be released to "help Abu Mazen." TOO BAD Israelis can't look to Egypt to play a constructive role. For the sake of expediency Cairo is ready to disregard the principles set down by the Quartet as a prerequisite for Hamas participation in a Palestinian unity government. Mubarak's regime is once again turning a blind eye to Palestinian arms smuggling beneath the Philadelphi Corridor which has now reached pre-Operation Cast Lead levels. Mubarak is also doing everything possible to harden Abbas's heart, telling the Egyptian parliament Saturday that Israel alone was to blame for the paralysis in the peace talks. He insultingly called on Israel to stop "Judaizing" Jerusalem and demanded it reconcile itself to the Arabs' refusal to recognize its right to exist as a Jewish state. With a straight face, Mubarak demanded that Israel end its blockade of the Strip - as if Cairo did not maintain an identical (surface) embargo between the Sinai and Gaza. AS MUCH as we Israelis ache to see Gilad Schalit home with his family, the emotional blackmail of campaigners who say the country should do "anything" to achieve his release could unleash on our home front the very same sociopathic killers Israel's security forces worked so hard to capture in the first place. We urge the premier to leave no stone unturned in trying to bring Gilad home, while placing the national interest above all.