Egypt has supplied Israel with evidence that abducted IDF soldier Gilad Shalit is still alive and being held somewhere in the Palestinians territories, according to a report published Wednesday in the London-based newspaper Asharq al-Awsat.

Israeli and Palestinian officials on Tuesday dismissed a separate report by Arabic-language newspaper Al-Hayat indicating that a deal had been reached on the release of abducted Israel Defense Forces soldier Gilad Shalit.

Al-Hayat, which is published in London, reported Tuesday that Shalit had been transferred to Egypt as part of an agreement involving Israel's release of 800 Palestinian prisoners. The article said the 800 prisoners would be released in three stages and that Israel had agreed to the deal on condition that none of the prisoners are those "with blood on their hands." According to the report, Israel stated that it would not release jailed Fatah leader Marwan Barghouti.

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A senior Gaza official involved in negotiations dismissed the report about Egypt and said no agreement had been reached. Israeli political and security sources confirmed that there was no deal, but security sources said progress has been made in negotiations. They refused to comment on the report that Shalit had been transferred to Egypt.

As of Tuesday, the Israel Prison Service had not been instructed to prepare to release prisoners as part of a deal with the Palestinians, although rumors are rife within the prisons.

Defense Minister Amir Peretz said Tuesday that he prefers "to speak less and avoid public statements in the media" regarding the prisoner exchange negotiations.

When asked whether an agreement was imminent, an Israeli official said: "If only it were correct, but these statements only intensify the pain of the families anticipating the release of their sons."

Noam Shalit: We are still in the dark
Shalit's father Noam said Tuesday that the family was continuing to live with the uncertainty that has been a regular part of their lives since Hamas kidnapped his son on June 25. He said the uncertainty was exacerbated by the reports circulating about the negotiations and the Israeli denial of the reports, and that as far as he knows, his son is still in the Gaza Strip.

"I don't know if something is cooking under the surface," said Noam Shalit. "We haven't received any new information."

Meanwhile, chief Palestinian negotiator Saeb Erekat denied a Bahraini news report that Palestinian Authority Chairman Mahmoud Abbas had said a prisoner exchange agreement had been reached. Erekat said Abbas had told a journalist that there had been progress in negotiations for Shalit's release.