No progress has been made in talks to free an Israeli soldier held captive by Palestinian fighters in Gaza, an Israeli government official said on Monday, denying Hamas assertions of a breakthrough. Palestinian armed factions have demanded Israel release more than 1,000 Palestinian prisoners in exchange for Corporal Gilad Shalit, abducted in June by gunmen who burrowed into southern Israel from the Gaza Strip. Hamas continues to have inflated demands, which are unacceptable, the government official said after Israeli Prime Minister Ehud Olmert held consultations with security and intelligence officials. There s no progress. On Sunday, a spokesman for the armed wing of the governing Hamas group said there had been a breakthrough in Egyptian-led efforts to negotiate a prisoner swap and that a deal could be close after what he described as a change in Israel s position. Olmert has said Israel would be prepared to free Palestinians if Shalit is returned. Israel has kept quiet about details of diplomatic efforts to bring him home. A planned visit to Egypt by Olmert later this week for talks with President Hosni Mubarak has aroused speculation in Israel that an agreement on Shalit s release could be announced at the summit in the Red Sea resort of Sharm el-Sheikh. Israel does not talk to Hamas, but has said it could free prisoners to President Mahmoud Abbas, a moderate who seeks an independent Palestine alongside Israel. Freedom for Palestinians held by Israel is an emotive issue in Palestinian society, which regards the prisoners as heroes. Israel holds more than 9,000 Palestinians, according to the independent Israeli human rights group B Tselem. A spokesman for the Popular Resistance Committees, a militant group which, with Hamas s armed wing and another faction seized Shalit, said on Sunday the soldier might be handed to Egypt after Israel freed a first group of prisoners. The spokesman, Abu Mujahed, said Shalit was in good health. The tank crewman s abduction prompted a devastating military offensive into the Gaza Strip, from which Israel had withdrawn troops and settlers in 2005. The offensive was brought to an end by a truce in November.
