A prisoner exchange deal looks increasingly likely, reports Khaled Amayreh from the West Bank US President George W Bush was expected to hold talks with the President of the Palestinian Authority (PA) Mahmoud Abbas yesterday -- their first meeting since October 2005. Abbas, in New York to attend the UN General Assembly, met on Tuesday the Israeli foreign minister, Tzipi Livni, who described their one-hour meeting -- the first between her and Abbas in five months -- as constructive, saying there was a need "to establish a permanent channel of dialogue" with Abbas. "The issue of the captured Israeli soldier Gilad Shalit was brought up in the meeting as well as Palestinian prisoners," said senior Palestinian negotiator Saeb Erekat. He added that the talks were intended to pave the way for a series of meetings between President Abbas and Israeli Prime Minister Ehud Olmert. Sources in Gaza say Egyptian mediators are intensifying efforts to secure a deal whereby the Israeli soldier, captured in Gaza last June, is freed in exchange for the release of an unspecified number of Palestinian prisoners. Last week Israeli security officials met senior Egyptian officials in Cairo, including General Intelligence Chief Omar Suleiman. The Israeli press quoted one of the visiting officials as saying that Egypt was pursuing two channels of communication towards a deal, one directed by Mohamed Ibrahim, Suleiman's representative in Gaza, the other coordinated by Suleiman himself who has reportedly been in touch with Hamas leader Khaled Meshaal and PA premier Ismail Haniyeh. Israeli officials link political progress with the PA, including any agreement to deal with the prospective national unity government, lift the siege on Palestinians and release abducted Palestinian parliamentarians, with the release of Shalit. Last week Shin Bet, Israel's domestic intelligence apparatus, overruled a military judge's decision to free 21 Palestinian ministers and lawmakers after they were found innocent of any charges. The judge accepted the abductees' lawyer's argument that Israel had no right to imprison people for taking part in Palestinian legislative elections which Israel itself okayed and allowed to take place. Shin Bet dismissed the judge's ruling on the grounds that releasing the abductees now would deprive Israel of an important "card" with which to pressure for the release of Shalit. With Abbas's return to Gaza today efforts will intensify to resolve any outstanding differences between Hamas and Fatah in order to pave the way for the formation of the long anticipated national unity government. The two are still at odds at Hamas's refusal to recognise Israel and accept outstanding agreements, including the Arab initiative of 2002 which calls for an end to Israeli occupation in return for Arab recognition of Israel. While Hamas has agreed to accept the Arab initiative it remains unwilling to make any explicit recognition of Israel in the absence of a reciprocal Israeli recognition of a Palestinian state on all Palestinian territory occupied in 1967. Talks between the two sides on the political programme of the proposed government were suspended earlier this week, with some Fatah leaders accusing Hamas of inflexibility and failing to appreciate the acuteness of the crisis provoked by Western and Israeli sanctions against the Hamas-led government. Abbas is rumoured to be under intense pressure from the US to secure Hamas acceptance of the three conditions -- recognising Israel, an end to armed resistance and commitment to outstanding agreements between Israel and the PA -- demanded by the Quartet (US, EU, Russia and the UN) in exchange for an end to the six-month financial blockade of the PA. Jordan, which Hamas accuses of being at America and Israel's beck and call, is also said to be "exhorting" Abbas to take a tougher line with Hamas. Despite the draconian measures imposed by Israel and the US -- including barring Palestinians from access to food and work -- Hamas still enjoys widespread popularity. Despite a public preference for a national unity government the Islamic movement's popularity remains largely unchallenged with the majority of Palestinians supporting its policy of not recognising Israel. According to a poll conducted by the Ramallah-based Palestinian Centre for Policy and Survey Research between 14 and 16 September, 38 per cent of respondents said they would vote for Hamas if new elections were held compared to 39 per cent three months ago. Fatah's popularity increased slightly over the same period from 39 to 41 per cent. Twelve per cent of those polled were undecided as to their voting intentions, with other factions securing no more than nine per cent of the popular vote combined. Some 66 per cent of respondents said they thought Hamas should not give in to the demands of donor countries to recognise Israel while just 30 per cent thought it should. (see p.7)