WELL, THAT WAS PRODUCTIVE:

Israel considering deal on prisoners (SARAH EL DEEB, 7/08/06, ASSOCIATED PRESS)

Israel's Public Security Minister Avi Dichter suggested yesterday that Israel is ready to cut a deal that would fall short of a direct prisoner swap.

Dichter said Israel could free some Palestinian prisoners as a goodwill gesture after Shalit is released and Hamas stops rocket attacks on Israel.

If there is calm, "Israel will need to, after some time, release prisoners as a reciprocal gesture," Dichter said. "Israel knows how to do this. Israel has done this more than once in the past.'' [...]

Egyptian mediators have proposed a two-stage deal in which Hamas would free Shalit and halt rocket attacks. In exchange, Israel would halt its offensive and promise to free some Palestinian prisoners in the future.

A Palestinian official close to the negotiations said Israel has agreed to the Egyptian formula, but wants the deal to be confidential, to avoid the impression of a direct prisoner exchange.