Palestinian Prime Minister Ismail Haniyeh has said that Israel is showing greater flexibility on the terms of a prisoner exchange involving captured Israel Defense Forces soldier Gilad Shalit, Israel Radio reported Tuesday.

Haniyeh said Egyptian intelligence chief Omar Suleiman, who has been a central mediator on the issue, told him that Israel has agreed in principle that the release of Shalit and the release of Palestinian prisoners by Israel would occur simultaneously, the radio reported.

Nonetheless, the two sides have yet to agree on the number of Palestinians that will be freed, or their identities, the radio said.

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The radio quoted Haniyeh as telling Al-Arabiya television during an interview that the Palestinian factions that are holding Shalit are demanding the release of senior Palestinians and other Arab prisoners.

Haniyeh denied reports that Iran is pressuring Hamas' Damascus-based political chief Khaled Meshal to freeze the prisoner exchange talks, the radio said.

Olmert emissaries pay secret visit to Abbas
Two emissaries of Prime Minister Ehud Olmert paid a secret visit to Palestinian Authority Chairman Mahmoud Abbas in Ramallah on Sunday, Haaretz has learned.

During the meeting, Olmert also spoke with Abbas by telephone, and the PA chairman said that he wants Israel to release Marwan Barghouti from prison independent of any deal for Shalit's release.

Barghouti, a senior official in Abbas' Fatah party, is currently serving five life sentences for his role in the murder of five Israelis during the intifada.

However, Olmert replied that he is not even willing to discuss this issue until after Shalit is returned to Israel.

Palestinian sources said that the meeting, which was attended by Olmert's bureau chief, Yoram Turbowicz, and his political advisor, Shalom Turjeman, was extremely positive.

"We received several very positive messages from Israel," said one.

This is the first time that Olmert's emissaries have been to Ramallah to meet with Abbas, so the very fact that they came was also perceived as an encouraging gesture, the sources said. Hitherto, Turbowicz and Turjeman have only met with lower-level PA officials.

At the meeting, Abbas and the Israeli officials also discussed U.S. Secretary of State Condoleezza Rice's planned visit to the region next month and the possibility of an Olmert-Abbas meeting. That meeting has been delayed by the lack of progress on Shalit's release.

Meanwhile, Haniyeh announced Monday that Iran had promised to give the PA's Hamas government $250 million in 2007.

Haniyeh, who was speaking at the conclusion of a visit to Tehran, termed the visit "historic and very successful."

"We achieved our goals on this visit," he said. "We found all the love it is possible to give to the Palestinian people."

According to Haniyeh, the Iranian donation will include a direct cash payment to Hamas of $100 million.

The remainder will be divided as follows: paying the unpaid salaries of employees of three ministries - labor, welfare and culture - as well as stipends to Palestinian prisoners and their families for the next six months ($45 million); paying stipends of $100 a month to some 100,000 unemployed Palestinian civil servants for the next six months ($60 million); doing the same for some 3,000 Palestinian fisherman ($1.8 million); building a cultural center and "national" offices, apparently for the government's use ($15 million); rebuilding some 1,000 demolished houses, at a cost of about $10,000 per house ($20 million); purchasing 300 new cars for the Palestinian government ($3 million); and purchasing Palestinian olive oil at a special high price ($5 million).

Iran also promised to build three new hospitals and 10 clinics in the territories over the next 10 years.

Haniyeh said that the financial aid was personally approved by Iran's supreme spiritual leader, Ali Khamenei, with whom he met on Sunday.

Following that meeting, Khamenei said: "The day will yet come when all of Palestine will be under Palestinian rule. Only struggle and resistance will restore all of Palestine, every centimeter of it, to its owners. The Palestinian government will receive full support from the Islamic Republic of Iran."