Sergeant Shalit, 25, returned home to a national outpouring of emotion in Israel after five years in captivity in the Gaza Strip. The first few hundred of over a thousand Palestinians being freed in stages from Israeli jails were greeted with kisses and flags in Gaza and the West Bank.
"I missed my family very much," a gaunt Shalit, his breathing laboured at times, said in an interview with Egyptian television, conducted before he was transferred to Israel. "I hope this deal will promote peace between Israel and the Palestinians."
But on the eve of the prisoner exchange, it emerged that international efforts to revive peace talks that collapsed 13 months ago in a dispute over Israeli settlement-building had failed to bring both sides together for meetings scheduled for 26 October in Jerusalem.
Envoys from the Quartet of mediators - the United States, the European Union, Russia and the United Nations - will instead hold separate sessions with Israeli and Palestinian officials. Hamas, an Islamist group that advocates Israel's destruction, opposes the peace process.
Shalit was taken across the frontier from the Gaza Strip into Egypt's Sinai peninsula and driven to Israel's Kerem Shalom - Vineyard of Peace - border crossing, from where a helicopter flew him to an Israeli air base for a reunion with his parents.
Simultaneously Israel freed 477 Palestinian prisoners, most of them to the Gaza Strip and many serving life terms for attacks that killed Israelis. Hamas leaders greeted former prisoners piling off buses bearing Red Cross insignia.
Egypt helped to mediate the long-awaited deal, and its army-backed interim government has sought to revive the country's role as a diplomatic linchpin in the Middle East.
Palestinians, awaiting the release of prisoners at a West Bank checkpoint, hurled rocks at Israeli soldiers, who responded with tear gas, after the military announced to the crowd over a loudspeaker that the group had been taken to another crossing.
In the television interview, Shalit said he found out a week ago that he was to be released. The soldier, who had not been seen since a 2009 video, said he had feared he would be held "for many more years".
Political commentators said it appeared unlikely the prisoner exchange agreed by the two bitter enemies would have any immediate impact on Israeli-Palestinian negotiations that broke down last year.
The mood in Israel was one of elation, with "welcome home" signs on street corners and morning commuters watching live broadcasts of the swap on mobile phones.
Shalit has been popularly portrayed as "everyone's son" and opinion polls showed that an overwhelming majority of Israeli backed the deal.
A military statement said he was in good health and the army released photographs of him, back in uniform and spectacles, saluting Prime Minister Benjamin Netanyahu. But witnesses said Shalit felt had nauseous and weak on his arrival in Israel and needed oxygen.
"I brought your boy home," Netanyahu said he told Shalit's parents, as he waited with them at the air base for the soldier's helicopter to land. The military distributed a photo of a uniformed Shalit saluting Netanyahu.
Shalit's parents had waged a public campaign to urge the right-wing leader to do more to secure his release and had set up a protest tent near Netanyahu's residence.
"But it's still a difficult day, and the price was heavy," Netanyahu said in a speech at the base, warning released prisoners "who return to terror" that they are "taking their life in their hands".
For Palestinians, it was a time to celebrate what Hamas hailed as a victory, and a heroes' welcome awaited the released prisoners. Palestinians see brethren jailed by Israel as prisoners of war in a struggle for statehood.
"This is the greatest joy for the Palestinian people," said Azzia al-Qawasmeh, who waited at a West Bank checkpoint for her son Amer, whom she said had been in prison for 24 years.
While Hamas's leader in Gaza, Ismail Haniyeh, embraced freed prisoners as they piled out of buses at the border town of Rafah, President Mahmoud Abbas, leader of the rival, secular Fatah movement, made a speech of welcome in the West Bank city of Ramallah, near Jerusalem.
Some see the prisoner deal as a boost for Hamas at the expense of Abbas, who has renounced violence in favour of negotiation but has so far failed to see years of talks with Israel produce major progress toward a Palestinian state.
The repatriation of captured soldiers, alive or dead, has long been an emotionally charged issue for Israelis. Many have served in the military as conscripts and see it as sacrosanct.
But they also feel stung by the high price they feel Israel is paying for Shalit. The deal received a green light from Israel's Supreme Court late yesterday after it rejected petitions from relatives of Israelis killed in Palestinian attacks to prevent the mass release.
Palestinians set free included Nasser Yatayma, serving a life sentence for involvement in a suicide bombing that killed 30 people attending a Jewish Passover seder, or traditional meal, in a hotel in central Israel in 2002.
Amana Mona, a Palestinian activist from the West Bank, was also released. She was jailed for life for using an Internet chatroom and promises of sex to lure a 16-year-old Israeli to his death in 2001, when she was 24.
Shalit was abducted in June 2006 by militants who tunnelled into Israel from the Gaza Strip and surprised his tank crew, killing two of his comrades. He was whisked back into Gaza and has since been held incommunicado.
Israel, which withdrew troops and settlers from Gaza in 2005, tightened its blockade of the small coastal enclave after Shalit's disappearance.
Reuters
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