Israel's prime minister on Tuesday presented Egypt with ideas for restarting Mideast peace talks, impressing his hosts with proposals that go further than past Israeli positions, Egypt's top diplomat said.
The meeting took place as a Hamas official said his group had rejected Israel's latest proposal for a prisoner swap with the Islamic militants. A top Hamas official in Syria told The Associated Press that the deal is on hold because Israel was refusing to release key prisoners and insisting on mass deportations of freed militants.
The peace process and prisoner swaps were high on Prime Minister Benjamin Netanyahu's agenda Tuesday. Egypt, the first Arab country to make peace with Israel, has been a key mediator on both fronts. Germany, at Hamas' behest, is also involved in the mediation.
Israeli-Palestinian talks broke off a year ago, and the two sides are odds on how to restart negotiations. The issue of Israeli settlements in areas claimed by the Palestinians has been a major sticking point, and Israel's offer of a partial settlement freeze has failed to break the deadlock. Israel committed to a full settlement freeze under a 2003 peace plan but never met that obligation.
Egyptian Foreign Minister Ahmed Aboul Gheit refused to divulge specifics on Tuesday's discussions, but said Netanyahu appears serious about trying to resume negotiations with the Palestinians.
"I can't talk about details, but the prime minister was discussing positions that surpass in our estimate what we've heard from them in a long time," Aboul Gheit told reporters. "I can't say that he has come with changed positions, but he is moving forward."
After returning home, Netanyahu told a gathering of his Likud Party that he is "very encouraged by the commitment of President Mubarak to promote the peace process between us and the Palestinians."
"I expect and hope to see such a readiness from the Palestinian Authority," he said. "It is time to move the peace process forward."
Netanyahu jetted in from neighboring Israel, joined by his top negotiator Yitzhak Molcho, for nearly three hours of talks with President Hosni Mubarak, his intelligence chief Omar Suleiman, and Aboul Gheit.
Egypt frequently mediates between the Jewish state and the broader Arab world. Aboul Gheit and Suleiman are traveling to the United States next week, while U.S. envoy George Mitchell is expected in Israel around the same time.
For months, Mitchell has been trying to bring Israel and the Palestinians back to the negotiating table. In the latest setback for peace efforts, Israel announced plans on Monday to build nearly 700 new homes in east Jerusalem, the section of the holy city that the Palestinians want to make their capital.
Netanyahu has offered a 10-month slowdown on West Bank settlement construction in what he says is a gesture to restart talks. But the Palestinians say the gesture is insufficient because it does not include east Jerusalem, their hoped-for capital, or 3,000 homes already being built in the West Bank.
The Palestinians have also insisted that Netanyahu resume talks from the point they broke off under his more dovish predecessor, Ehud Olmert. Netanyahu has said he is not bound by Olmert's offers _ which included proposals for shared control of the holy city of Jerusalem and a broad pullout from nearly all of the West Bank.
Aboul Gheit said Netanyahu gave his hosts the impression that he genuinely wants to get diplomacy moving again, and told The Associated Press that "everything is on the table." At the same time, he said settlement construction must be halted for negotiations to succeed.
Aboul Gheit also said Egypt asked Israel to ease restrictions on Palestinians in the West Bank and Gaza, and Israel promised to take measures what would ease freedom of movement.
Also on the agenda were the prisoner swap talks. Hamas is seeking hundreds of Palestinian prisoners in exchange for a captured Israeli soldier it has held for more than three years.
A delegation of Hamas leaders has left their Gaza Strip stronghold to discuss Israel's latest proposal with Hamas' exiled leadership in Syria. A top Hamas official in Damascus told The Associated Press that the group had rejected Israel's latest offer, and asked the German mediator to go back to Israel for another offer.
"Hamas decided to tell the German mediator that they will not to accept this offer," the official said. "We are waiting for another round of mediation."
The official, speaking on condition of anonymity because he was discussing confidential discussions, said that Israel is refusing to release 10 senior militants sought by Hamas. He said Israel also wants 200 freed militants to be deported.
Aboul Gheit said Egypt understands Hamas' reservations on the proposal, saying that Egypt doesn't agree with deporting prisoners and refusing to release "certain" prisoners
Israeli officials had no comment.
AP correspondent Mohammed Daraghmeh contributed reporting from Ramallah, West Bank.