Palestinian Prime Minister Ismail Haniyeh's chief adviser said on Saturday that talks on the release of abducted IDF soldier Gilad Shalit were moving along due to Israel's expressed readiness to free Palestinians jailed in Israel, including central Hamas activists.

The soldier's father, Noam Shalit, said in response to Ahmed Yusef's declaration, "it sounds to me like another headline. I can't know how much truth there is to it. Of course, with every headline we hope it's true... but it doesn't seem to us there is anything new, and no official Israeli source has reported to us on such a development or any other."

Yusef also said Qatar would present an updated version of its mediation initiatiative for reconciliation between Fatah and Hamas. He said the initiative would be acceptable to Hamas after a change to a clause in the original version regarding recognition of Israel within a two-state solution.

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Yusef said Hamas was opposed to Abbas' idea of a Palestinian cabinet of technocrats, and would agree only to a unity government. He said representatives from the rival factions would meet in Cairo after the Eid al-Fitr festival marking the end of the month of Ramadan.

The Palestinian daily al-Ayam reported Friday that Qatari ruler Sheikh Hamad Halifa al Thani was prepared to visit the Palestinian territories to meet with Hamas leaders and Palestinian Authority Chairman Mahmoud Abbas, for a mediation attempt.

Prime Minister Ehud Olmert said last week that the Arab team attempting to mediate between Israel and Hamas "understood that Hamas is full of liars and swindlers." He said the Qatari Foreign Minister had also given up attempts to reach an agreement with Hamas, which would have included recognition of Israel.

"Hamas is not ready to recognize Israel, and the conversations they are conduction on the matter are meant to buy time," he said.