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Abducted Israeli soldier Gilad Shalit will be transferred to Egypt within a few days as part of a prisoner-exchange deal with Hamas, European diplomatic sources said Thursday.

The move is part of a new United States initiative that includes Egyptian and Syrian pressure on Hamas, internal Palestinian reconciliation and Israel's opening of the Gaza crossings.

A reliable European source said this Egyptian-brokered agreement was reached two days ago. A Palestinian source confirmed the report last night but officials in Jerusalem denied any knowledge of it.

The idea to transfer Shalit to Egypt in exchange for the release of Palestinian women, teens, cabinet ministers and parliamentarians being held in Israeli prisons was raised about a year ago during a visit by former U.S. president Jimmy Carter to Damascus, Jerusalem and Gaza. Apparently Carter raised it again on his visit earlier this month, during which he met Noam Shalit, Gilad's father.

According to the plan Shalit will be entrusted to Egyptian intelligence, and his parents will be allowed to visit him. He will be returned to Israel after an agreement is reached regarding the list of Hamas prisoners to be released that was previously submitted to the cabinet.

An Egyptian source close to the developments told Haaretz that Hamas is insisting that Israel release prisoners with "blood on their hands" as approved by the cabinet under former prime minister Ehud Olmert.

Israel this week freed Palestinian Legislative Council Speaker Sheikh Aziz Dweik after three years in prison. Dweik, a leader of Hamas in the West Bank, espouses a moderate line in the organization.

The European source said Shalit's transfer to Egypt was the first stage of the Egyptian-brokered agreement hammered out between Fatah, Hamas and other Palestinian factions, in coordination with the U.S. and with Syria's support.

The deal would put the Gaza Strip under the leadership of a joint committee subordinate to Palestinian President Mahmoud Abbas, removing it from the control of the government of Prime Minister Salam Fayyad.

On Tuesday Palestinian news agency Maan quoted Egyptian sources as saying that Shalit was to be transferred from the Gaza Strip into Egypt within hours, a report that Israeli sources denied.

Shalit was abducted in a cross-border raid by Gaza militants on June 25, 2006.

The leader of Hamas said yesterday he welcomes U.S. President Barack Obama's new approach to the Middle East, but is waiting to see action.

In a televised speech Hamas chief Khaled Meshal pointedly avoided any mention of the recent turmoil in Iran, even though Hamas is backed by the Tehran regime.

Hamas, which controls Gaza, has increasingly tried to reach out to the Obama administration in recent weeks. The militants are trying to bring an end to an international boycott of Hamas and a two-year border closure of Gaza.

Meshal said the only way for Israel to win Shalit's release is by striking "a full deal," and not "the way of obduracy" which he claims was characteristic of Olmert.

Noam Shalit urged Israelis yesterday to think of his son's plight in Hamas captivity.

"My request today, June 25, 2009, is for every person in the country, man and woman, young and old, to close their eyes for three minutes. Three minutes only, and to wait until these minutes are over, and in this time for everyone to try to think of what my son Gilad is going through," Noam Shalit told Army Radio.

In the radio interview, Noam Shalit described his son as "a young man who is waiting with bated breath, not only for three minutes, and not only for three hours and not even for three days; but waiting in darkness and despair, suffering physically and mentally, for the freedom that was taken from him three years ago."