Egyptian security chief Omar Suleiman said on Wednesday night that he presented a prisoner exchange deal to Israeli officials during a visit to Tel Aviv after meetings with Hamas politburo chief Khaled Mash'al last week.

According to the plan, which Israeli officials have not yet discussed in detail, the prisoner swap between captured Israeli soldier Gilad Shalit and over 1,000 Palestinian political prisoners would be carried out over three stages.

In the first stage of the exchange, Israel would release all women and children, estimated at 400, and Shalit would be handed over to Egypt. In the second stage, Egypt would turn Shalit over to Israel and 500 more prisoners would be released. In the last stage of the swap, Hamas is demanding that 500 Palestinian prisoners are set free, including Fateh's West Bank Secretary, Marwan Barghouthi, who is currently serving several life sentences.

Mash’al also told Suleiman Hamas would demand that all prisoners arrested before the Oslo Accords be released in addition to 29 prisoners who have been incarcerated for over 20 years.

While it is highly unlikely that Israel would agree to all of Hamas' demands, especially regarding the criteria for releasing the prisoners, Israeli officials have shown optimism over the Suleiman meeting yesterday. Israeli Prime Minister Ehud Olmert said he was "very satisfied" with the meeting between Suleiman and Israeli Infrastructure Minister Benjamin Ben Eliezer, who said Suleiman had reassured him that a swap could be finalized in the next three weeks.

Meanwhile, as President Abbas meets with US Secretary of State Condoleezza Rice in Jericho today, Fateh officials have expressed their doubt over the possibility of a national unity government ever coming to fruition.

One unnamed Fateh source close to President Abbas was quoted in the London-based Al-Sharq Al-Awsat as saying that national unity government talks are in the "freezer" at the moment because of Hamas' "intransigence." The source said one of the obstacles to the formation of the government is that Hamas was unwilling to relinquish the interior and finance ministries to independents, and had blocked the appointment of Salaam Fayyad to the latter.

Prime Minister Ismail Haniyyeh echoed similar concerns, saying national unity talks had reached an impasse in their "last stage." Haniyyeh, who wrapped up the first stint of his Arab and Islamic tour in Cairo today, said the Palestinian government has faced a three-dimensional struggle since its inception: the siege and political isolation of the Palestinian government; the economic embargo; and the Israeli military escalation against the people, which have created difficulties but not forced the government to its knees.

Although Haniyyeh acknowledged that certain obstacles and difficulties stood in the way of finalizing a national unity government, the premier emphasized that talks would continue.