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Palestinian news agency Maan on Tuesday quoted Egyptian sources as saying that kidnapped Israel Defense Forces soldier Gilad Shalit was about to be transferred from the Gaza Strip into Egypt within hours.

Shalit was kidnapped by Gaza militants in a cross-border raid in June, 2006. Hamas, the rulers of the Gaza Strip, have demanded the release of hundreds of Palestinians prisoners from Israeli jails in exchange for the captive soldier's freedom.

According to the Palestinian report, which has yet to be corroborated by any other news source, senior Egyptian army officers were deployed at the Gaza-Egypt border in efforts to secure a path in which the captive soldier was to be transported.

Israeli security officials denied the report, calling it "completely unfounded," while the Shalit family said that they had no knowledge of any new developments in the prisoner swap negotiations.

Hamas also denied the report, saying in a statement "we are surprised by the unprecedented media campaign about the prisoner swap deal."

"These are like the Israeli reports, which are nothing more than trial balloons that try to uncover Hamas' position in the prisoners' deal," the statement said.

Earlier Tuesday, Israel released from prison the Hamas speaker of the Palestinian parliament, Aziz Dweik, who was jailed following Shalit's abduction, to serve as a bargaining chip in negotiations for his release.

Israeli prosecutors failed to persuade a military court to extend Dweik's prison term during a hearing last Wednesday. Dweik, and dozens of other Hamas politicians in the West Bank, were arrested in 2006 the Shalit kidnapping.

The dragnet paralyzed the Palestinian Legislative Council, which had been dominated by Hamas since it crushed President Mahmoud Abbas's Western-backed, secular Fatah faction in a parliamentary election earlier that year.

Meanwhile Tuesday, Prime Minister Benjamin Netanyahu said that he would not rule out renewing negotiations with Hamas over the release of the captive soldier.

Netanyahu, who spoke to reporters in Rome after meeting with Italian Prime Minister Silvio Berlusconi, said that he had given instructions to every government arm to make a combined effort bring about Shalit's release.

Netanyahu also denied the report that Shalit's release was imminent.