Meshal Shalit Netanyahu Salman AP
From left: Hamas chief Khaled Meshal, captured IDF soldier Gilad Shalit and Prime Minister Benjamin Netanyahu Photo by Emil Salman and AP
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Defense Minister Ehud Barak confirmed on Tuesday that there was "a grain of truth" to reports of renewed negotiations taking place in Cairo for a prisoner swap deal to secure the release of Israel Defense Forces soldier Gilad Shalit.

Barak told Israel's 103 FM, however, that despite the validity of the rumors he "preferred not to say anything [about the negotiations], because it doesn't help."

Earlier on Tuesday, the London-based Arabic daily Al-Hayat reported that Hamas political chief Khaled Meshal was due to arrive in Cairo to begin a third round of indirect talks with Israel over a prisoner swap deal.

The report quoted Palestinian sources saying that the Israeli negotiators were showing willingness to compromise, especially over issues such as releasing jailed Israeli Arabs and East Jerusalem residents. Sources also said an agreement has been reached over the number of prisoners who would be deported from the West Bank after their release.

Hamas senior official Osama Hamdan told Al-Hayat, however, that Israeli Prime Minister Benjamin Netanyahu is still unwilling to pay the full price needed to complete the agreement.

The last time Israel and Hamas were known to be close to an agreement on the prisoner exchange deal was in December 2009, when Hamas turned down a compromise offer to which Israel had agreed.

Hamas is demanding that Israel release 450 Palestinian prisoners, while Jerusalem appears willing to release half that number.

Egypt's involvement as a mediator in the latest round of talks reported in foreign media outlets reflects an improvement in relations between the provisional government in Cairo and the Hamas leadership in Gaza.