A senior Israeli cabinet minister suggested for the first time that some Palestinian prisoners might be released if abducted Army Corporal Gilad Shalit was freed and Qassam rocket fire halted.
The hint by Interior Minister Avi Dichter came as the Palestinian President Mahmoud Abbas said that Israel had already promised potential releases from among certain categories of prisoners in return for the freeing of Cpl Shalit.
Mr Dichter was quoted as telling a conference that in such circumstances "Israel knows how to carry our a release of prisoners as a goodwill gesture," adding "We did it in the past and we know how to do it."
Mr Abbas went significantly further by saying Israel had already promised the Egyptian President Hosni Mubarak they would release "a "number" of prisoners among those "that have been there for more than 20 years, those that are sick, women and children"
Mr Abbas fiercely condemned the Israeli incursion on Thursday into northern Gaza that resulted in the deaths of 20 Palestinians and an Israeli soldier and said Israeli military operations needed to end to create an " atmosphere" in which diplomatic efforts could proceed freely.
But he added that President Mubarak had been told that if Hamas militants and others holding the corporal freed him, "this will happen; they will withdraw, they will release the PLC members [from Hamas who were detained last week in the West Bank] and the prisoners."
Mr Abbas also said the Israeli Prime Minister Ehud Olmert had told Mr Abbas personally at their meeting in Petra last month well before the raid by Palestinian militants 13 days ago in which Cpl Shalit was abducted that he would announce prioner releases when the two met in earnest.
At least five more Palestinians were killed yesterday in a series of aerial and tank attacks directed at militants as funerals were held through the north of Gaza for the Palestinians.
The Israel Defence Forces are also investigating whether its First Lieutenent Yehuda Bassel, 21, killed on Thursday, was the victim of friendly fire. The officer's funeral also took place in southern Israel yesterday.
The Atrata district of Western Beit Lahiya where the heaviest fighting took place on Thursday, was somewhat quieter yesterday, though sporadic machine-gun fire from Israeli tanks and armoured vehicles continued sporadically through its streets.