JERUSALEM – Israel postponed a crucial Cabinet meeting a few hours before it was to convene Monday morning, giving negotiators more time to try to finalize an agreement with Hamas over the release of a captive Israeli soldier held by Palestinian militants in the Gaza Strip.
Adding urgency was a Palestinian shooting attack in the West Bank that killed two Israeli police officers.
As talks continued past midnight in Cairo, lame-duck Prime Minister Ehud Olmert rescheduled the Cabinet meeting for Tuesday morning. Earlier he said this round of talks would be the last before Israel's new government takes over.
Prime Minister-designate Benjamin Netanyahu is putting together a hawkish coalition that is likely to be less accommodating to Hamas demands to exchange the soldier for hundreds of Palestinian prisoners, including convicted murderers.
While Israel has agreed to such deals in the past, critics have warned that the freed prisoners will resume violence once they hit the streets.
Also hovering over the talks were separate negotiations between Hamas and its pro-Western Palestinian rival, Fatah. Egypt has been mediating negotiations between the sides in hopes of forging a unity government.
Both a prisoner swap and an end to two years of Palestinian infighting are seen as necessary steps for rebuilding the Hamas-ruled Gaza Strip, which suffered heavy damage during a three-week Israeli military offensive in January.
As the talks in Cairo continued Sunday, Palestinian gunmen killed two Israeli police officers traveling in a vehicle in the West Bank, said Israeli security officials, speaking on condition of anonymity because the report was preliminary.
Israeli rescue service director Eli Bean said medics found the car overturned on a Jordan Valley road with Israelis who had been shot inside.
It was the first fatal shooting attack in the West Bank since April 2008. Israel TV's military analyst said the attack was likely timed to coincide with the talks over freeing the Israeli soldier.
Defense officials said if a prisoner exchange is presented, there are enough votes to approve it. The officials said the talks were serious in nature. They spoke on condition of anonymity because they were discussing sensitive government policy.
Winning the release of Sgt. Gilad Schalit would give Olmert a key diplomatic victory in his final days as prime minister. The designated prime minister, Benjamin Netanyahu, is in the final stages of putting together a coalition government following last month's parliamentary election and could take office as soon as this week.
Schalit, 22, was captured in June 2006 in a cross-border raid that killed two other soldiers. The kidnapping took place shortly after Olmert took office, and the case has cast a cloud over his three-year tenure.
Speaking to his Cabinet, Olmert said Sunday that he had sent Yuval Diskin, the head of the Shin Bet internal security service, and veteran negotiator Ofer Dekel to Cairo. Diskin's agency keeps close tabs on Palestinian militants.
Both sides have strong incentives for reaching an agreement quickly. Olmert, widely seen as a failure as prime minister, is eager for a last-minute victory that could burnish his legacy.
Hamas, meanwhile, wants Israel to lift a crippling economic blockade of Gaza as part of a larger cease-fire following a fierce Israeli military offensive earlier this year. Israel has said it will not open the borders — a necessity for the reconstruction of Gaza — until the soldier comes home.
Hamas is also likely concerned about the prospect of Netanyahu taking office. Netanyahu is expected to take a much tougher approach toward Hamas.
Even so, an agreement was far from certain. Hamas is demanding a heavy price for the soldier: the release of hundreds of prisoners, including dozens of Hamas militants convicted in deadly attacks on Israelis.
While Israel has agreed to such deals in the past, critics have warned that the freed prisoners will resume violence once they hit the streets.
Hamas officials in Egypt and the Gaza Strip said they had no word on new developments, but said the Islamic militant movement would not ease its demands.
"Our demands are well known and have been submitted to the Egyptians. If they agree to our demands and release our prisoners, Schalit will be free," said Abu Obeida, a spokesman for the Hamas military wing, one of three armed groups that captured the soldier.
Local media reports said the last stumbling block was an Israeli demand that some of the prisoners slated for release be deported as a security move meant to prevent future attacks. Palestinian officials said early Monday that the number to be deported was the last open issue.
As the Schalit talks were wrapping up, Hamas and Fatah officials held another day of unity talks in Cairo, wrangling over the sensitive issue of whether to recognize Israel.
The talks in Cairo are aimed at ending divisions going back to the militant Hamas group's violent takeover of the Gaza Strip in June 2007, which left the more moderate Fatah movement in charge only of the West Bank.
Hamas rejects Israel's right to exist. Fatah, which has been conducting peace talks with Israel, says without recognition, it will be impossible to win international support for rebuilding Gaza.
Samir Ghosheh, a member of the executive committee of the Fatah-led PLO, said the talks hinged on whether Hamas had to "commit" itself to past PLO agreements with Israel. The Islamic militant group prefers wording that would require it only to "respect" them. Such divisions caused a short-lived unity government to dissolve in civil war in 2007.
The sides must get over other deep divisions, including control over Palestinian security forces, a schedule for new presidential and parliamentary elections and PLO reforms that would give Hamas a voice in the body.
Hamas spokesman Fawzi Barhoum said there had been "progress and achievement" in some areas but acknowledged considerable work remained.
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