20091217

GAZA (Reuters) - Prime Minister Benjamin Netanyahu has invited a senior Egyptian mediator to Jerusalem on Sunday, raising speculation that Israel is about to make its latest response to the Islamist group Hamas for a major prisoner swap.

Egypt and Germany are trying to mediate the prisoner exchange, which would set free a captured Israeli soldier, Gilad Shalit, in a deal to release nearly 1,000 Palestinians of the 11,000 held in Israeli jails.

The freeing of Shalit, who was snatched by Hamas in a raid on the borders of the Gaza Strip more than three years ago, has been a political priority for Netanyahu as it was for the government that preceded his, led by Ehud Olmert.

An exchange would be the first significant sign of a thaw between Israel and Hamas since Israel launched a military offensive on December 27 in which at least 1,000 Gaza Palestinians and 13 Israelis were killed in three weeks of heavy conflict.

The United Nations and Western powers hope a successful swap will open the way to a relaxation of Israel's blockade of Gaza, where 1.5 million Palestinians are dependent on food aid and smuggled goods for daily survival.

NEGOTIATIONS SLOW

Negotiations over the list of Palestinians to be released in return for Shalit have proceeded slowly, with Israel balking at allowing men convicted of deadly attacks on Israelis to go free and return to the Palestinian territories.

An official, who declined to be identified, said Egypt's mediator, Chief of Intelligence Omar Suleiman, would visit Israel on Sunday -- when Netanyahu holds his weekly cabinet meeting.