Israel and Hamas will announce a cease-fire in three days, a senior Hamas official said in Cairo yesterday.

"Most of the obstacles that prevented us from reaching an agreement were resolved, and the announcement of a deal is expected within three days," said Taher al-Nono, a member of Hamas' negotiating team in Egypt.

Israeli sources involved in the negotiations told Haaretz that the final announcement would also reference kidnapped soldier Gilad Shalit, who has been in Hamas custody for more than two years. Israel also wants guarantees that Hamas will be blocked from smuggling weapons into Gaza.

The Egyptian negotiators were expected to release an announcement yesterday, too, but they did not do so. It remained unclear whether the Egyptian announcement would include a reference to Shalit, or a more general call to broaden indirect talks between Israel and Hamas.

Noam Shalit, the father of the captive soldier, met yesterday with the Quartet's envoy to the Middle East, Tony Blair. Following the meeting, Shalit noted that Israel "has been given a window of opportunity that may not present itself in the future."

Hamas' primary demand is that Israel open the crossings to Gaza. But Israel says that this can happen only if Hamas frees Shalit. The Israeli sources said negotiations on Shalit's release are now stuck on the issue of several Palestinian prisoners convicted of serious crimes, whom Hamas wants released.

These prisoners are among a few hundred Hamas is demanding in exchange for Shalit, and were convicted of involvement in deadly attacks inside Israel. A full 700 to 1,000 prisoners could be released in exchange for Shalit, including some minors and women.

In some of these cases, Israel would consider releasing prisoners to a neighboring Arab country, probably Syria or Lebanon. Shin Bet Security Service head Yuval Diskin said he would not oppose such an arrangement.

Nono, the Hamas speaker, said the agreement would ensure the end of all violence in the Hamas-controlled Gaza Strip and the opening of the territory's border crossings.

In talks in Cairo, Hamas officials reportedly objected to calling the release of the Palestinian prisoners a goodwill gesture toward Palestinian President Mahmoud Abbas. They were, however, willing to accept Israel saying such a gesture was toward Egypt.

Israeli defense officials said Hamas' relationship with the Palestinian Authority is still very tense, and is affecting progress on a deal between Hamas and Israel.

Earlier yesterday, Egyptian state news agency MENA said Hamas' strongman from Gaza, Mahmoud Zahar, and deputy chief Moussa Abu Marzouk from the group's Damascus branch were taking part in the negotiations in the Egyptian capital.