The Al-Masry al-Youm daily cited informed Palestinian sources saying that Egypt was awaiting Israel's response on the proposed list of prisoners to be freed in exchange for Israeli Corporal Gilad Shalit, abducted more than a year ago.
The Israeli Cabinet approved July 8 the release of 250 Palestinian prisoners, but said they still had to finalize the list. Israel is holding some 10,000 Palestinian prisoners.
The Palestinians have urged Israel to release some of its most prominent prisoners, including Marwan al-Barghouti, a top official in Abbas' Fatah movement, who is serving life sentences for involvement in five murders.
Israel has so far rejected calls for Al-Barghouti's release, although Prime Minister Ehud Olmert has said the prisoners should come from Abbas' Fatah movement.
The paper said Egypt was attempting to convince the Israeli leadership that the release of such a popular political figure as Al-Barghouti could be instrumental in resolving the current Israeli-Palestinian conflict.
At the same time, Egypt is in talks with Islamist group Hamas on the release of Gilad Shalit, who was captured in June 2006 in a cross-border raid by Gaza-based Palestinian militants reportedly linked to the group's militant wing.
Following the kidnapping, Israel sent troops into the Gaza Strip to secure Shalit's release in operations that left 500 Palestinians dead.
Egypt later brokered talks between the abductors and Israeli authorities, which have been suspended in recent months amid internal fighting in Gaza, now controlled by Hamas after it ousted the more moderate group Fatah.
Hamas has recently mediated the release of BBC journalist Alan Johnston, who had been held for four months by another radical Islamic group in the Gaza Strip, and the release of the Israeli corporal could improve Hamas's image in the West, the paper said.
