Israel plays down reports of imminent Gaza deal

By Alastair Macdonald and Adam Entous
JERUSALEM (Reuters) - Israeli officials played down reports on Friday that a deal was close with Hamas that would include the release of an Israeli soldier held captive in the Gaza Strip in exchange for Palestinians held in Israeli jails.
Israeli and Palestinian political sources and Western diplomats confirmed, however, that Egyptian mediators were still working on a package of measures that could combine exchanges of prisoners, ceasefire agreements, an easing of Israel`s blockade on Gaza and rapprochement between rival Palestinian factions.
A July 7 deadline set by Egypt for Islamist Hamas and the Fatah faction of Palestinian President Mahmoud Abbas to ease a schism that has divided Gaza from the West Bank, as well as this week`s third anniversary of Hamas`s capture of Israeli soldier Gilad Shalit, has fueled speculation of a deal.
Responding to Israeli press reports citing European diplomats that Shalit was about to be sent to Egypt, Israeli officials and European diplomats in the region said on Friday they knew of no new concrete developments in negotiations.
Hamas officials have also played down earlier reports.
Nonetheless, diplomats said negotiations were in train.
The family of Shalit, who also has French citizenship, has stepped up pressure on new Israeli Prime Minister Benjamin Netanyahu to reach a deal. The government has long baulked at Hamas`s price for Shalit`s release, notably the freeing of leading Hamas militants responsible for attacks on Israelis.
Netanyahu is also under pressure from the United States and its European allies to ease a blockade on Hamas-ruled Gaza that has prevented billions of dollars in foreign reconstruction aid from reaching the enclave since Israel`s offensive in January.
Israel, which is also under U.S. pressure to renew peace talks with Abbas, has tied the blockade to the fate of Shalit.
An Israeli government official said Netanyahu wanted the international community to pressure Hamas, not Israel: "Hamas has held Gilad Shalit for some three years. He hasn`t even been given one visit by a representative of the Red Cross.
"The international community should be pushing for his release and should be pushing for such a visit."
"PACKAGE DEALS"
Hamas, which seized control of Gaza two years ago in fighting with Fatah-led forces, is keen to bolster its support among the 1.5 million Gazans by improving supplies.
Aziz Dweik, the speaker of the Hamas-dominated Palestinian parliament elected in 2006, told Reuters on Thursday, two days after he was released himself from an Israeli prison: "The Egyptians are behind the package deal which is expected to speak about the truce, to speak about opening all the crossings to (the) Gaza Strip and to speak about Shalit."
"We would like (it) to be accomplished in the very few coming days because I left ... almost 11,000 prisoners in Israeli jails," Dweik added, speaking in English.  Continued...
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