The independent Ma’an news agency quoted Hamas sources as saying that the Israeli delegation agreed during a Tuesday’s indirect meeting in Cairo to cut the number of Palestinian prisoners of Palestinians it refuses to release from 120 to 40. Israel refuses to release the 120 prisoners since they were involved in deadly attacks against Israeli targets.

Ahmed Al-Ja’bari, head of Hamas’ military wing, is representing the Hamas side in the negotiations, while David Meidan, the new Israeli negotiator in Shalit swap talks, represents the Israeli negotiating team. Shalit has been in Hamas captivity since he was abducted in a 2006 cross-border raid.

The report said that the Israeli team agreed to reduce the number of prisoners it wants to expel from West Bank after their release. Israel wished to expel 140-150 prisoners. Hamas has rejected the Israeli condition.

The sources added that Israeli team also agreed to release all jailed Palestinian women as well as Arab and East Jerusalem prisoners, something which Israeli strongly opposed to in the past.

According to the report, the two teams received a position paper from the Egyptian mediators which detailed all points of agreement and disagreement between the two sides and will present them to their leaderships in order to formulate new proposals.

On Tuesday, the US envoy to the United Nations Suzan Rice called the Hamas movement to release Shalit unconditionally.

Hamas condemned the US envoy’s remarks. “We condemn the remarks of Susan Rice for not referring in a single word to the suffering of thousands of Palestinian prisoners” the Hamas leader Atallah Abu Al-Sibah said. He added that such statements “do not help in releasing Gilad Shalit.”

Since December 2009, Egypt, Germany and France had failed to finalize the prisoners’ swap deal for the release of Shalit in exchange with hundreds of Palestinian prisoners. The failure is due to differences between Hamas and Israel.

Hamas wants Israel to free up to 1,000 Palestinians in Israeli prisons in exchange for the release of Shalit, and the Palestinian movement has reportedly presented a list of 450 names in Israeli prisons.

Israel also objects to freeing Israeli Arab prisoners as well as several Hamas military leaders.