The Palestinian leader Yasser Arafat called the family of Marwan Barghouti in the early hours of this morning and said that the imprisoned West Bank figure will be released within two days, family members said.
Israeli officials were not available for comment, and the relatives expressed some scepticism about Mr Arafat's news, delivered in a telephone call at around 2am local time this morning (midnight BST).
Mr Barghouti is currently on trial for murder, charged by Israel with complicity in terror attacks that have taken the lives of 26 Israelis. The prosecution completed presenting its case on 2 June, but Mr Barghouti, who does not recognise the right of the Israeli court to try him, has not decided whether to present a defence.
Mr Barghouti is the leader in the West Bank of Mr Arafat's Fatah movement. He has made fiery speeches in favor of continued Palestinian resistance and has become a symbol of the current uprising. However, he has insisted that, as a member of the Palestinian parliament, he remains a political figure and has no connections with violence.
One of Mr Barghouti's lawyers was in Cairo last week for discussions with Egyptian officials, leading to speculation that a deal might be in the making to trade Mr Barghouti for Azzam Azzam, an Israeli Arab imprisoned in Egypt since 1997 on espionage charges.
Also, Egypt is deeply involved in trying to negotiate a ceasefire to halt attacks by Palestinian militants against Israelis, to allow implementation of the American-backed "road-map" peace plan. There was speculation that Mr Arafat's late-night call to Mr Barghouti's wife, Fadwa, could be linked to these efforts.
However, Israel has never indicated that Mr Barghouti would be released. The highest-ranking Palestinian official in custody, he is being tried by a civilian court, an unusual step underlining the importance which the Israelis attach to the proceedings.