RAMALLAH // In spite of repeated denials, reports that Hamas and Israel are close to agreeing a prisoner exchange deal continue unabated. According to Israeli media reports, Khaled Meshaal, the Hamas leader-in-exile, was en route yesterday to Cairo for discussions on how to finalise an exchange deal that would see at least 450 Palestinian prisoners released in stages in return for the release of Cpl Gilad Shalit, an Israeli soldier captured three years ago along the border with Gaza. Mr Meshaal is due to meet Egyptian officials as well as a delegation from Gaza during his visit. Hamas yesterday said that Mr Meshaal was in Cairo for talks on how to further Palestinian unity discussions, and a spokesman denied that a prisoner exchange deal was on the agenda. "There are several reasons for the visit," said Ayman Taha, the spokesman. "The main one is the internal dialogue. A prisoner exchange deal will only be discussed if it happens to come up in talks." Mahmoud Abbas, the Palestinian president and Fatah leader, was also in Cairo yesterday for talks with the Egyptian President Hosni Mubarak, but it was not clear whether there was a connection between the visits of the two rivals, Mr Abbas and Mr Mashaal. Mr Abbas left before Mr Mashaal arrived, but he did say the topic of reconciliation talks came up during his discussions with Mr Mubarak. He also reiterated his stance that a total settlement freeze was a condition for restarting talks with the Israelis. Speculation about a prisoner exchange deal picked up pace last week when it was revealed that Germany was involved in mediation efforts along with Egypt. Germany has mediated prisoner exchange deals involving Israel before, the latest in 2006 between Israel and Hizbollah, the Lebanese Shiite group. Cairo has been trying to mediate the release of Cpl Shalit since 2007 but with no luck. Hamas has previously asked for a non-regional mediator in a bid to ensure that Israel lives up to its side of any bargain. According to a report last week in Der Spiegel, a German magazine, Israel has already agreed to a deal in which it would release 450 Palestinian prisoners, including some convicted of killing Israelis. Hamas would then allow Cpl Shalit to travel to Cairo, after which Israel would release more prisoners. Some of those released, according to the report, would be exiled, a sticking point in previous negotiations. Hamas has yet to respond to the proposal. German involvement would certainly take negotiations to another level, and Mr Taha acknowledged that German mediation efforts were "extremely serious". Nevertheless, he said, negotiations were "only at the beginning". Also last week, Israel released nine Hamas ex-parliamentarians imprisoned since 2006. While the nine legislators had served their full 40-month sentences, the release could be seen as a first confidence-building measure. On the other hand, it seems improbable that Hamas would agree to a deal in the absence of a separate agreement on the issue of opening crossings into Gaza. While Israel's siege on the impoverished Gaza Strip has somewhat eased in recent weeks, Israel still bars much-needed construction materials from entering Gaza. The two-year Israeli siege has had a dramatic impact on Gaza's economy. Some 95 per cent of local industries have had to shut down, while repair work to Gaza's electricity power plant and debilitated sewage system remains undone. In addition, the absence of construction materials means that any reconstruction of Gaza after Israel's devastating onslaught in January cannot begin. Mr Taha accepted that a prisoner exchange deal with Israel could have a positive impact on the internal Palestinian dialogue. Nevertheless, he said, without an opening of the crossings, "there would be no exchange deal". okarmi@thenational.ae