Senior Hamas official Mahmoud Zahar told Israel Radio that the German mediator met with the terror group's negotiating team for three hours in Gaza on Wednesday afternoon, relaying Israel's latest proposal in talks on a prisoner exchange deal to secure the release of IDF St.-Sgt. Gilad Schalit.

Hamas will study the Israeli offer and issue its response within several days, he told the radio station, adding that the mediator has left the Gaza Strip for Germany.

In Jerusalem, Prime Minister Binyamin Netanyahu convened the Security Cabinet on Wednesday morning to discuss recent progress made in the negotiations to secure Schalit's release.

In London, an editorial published in Al-Quds Al-Arabi urged Hamas to reject Israel's latest offer.

"The biggest error Hamas could possibly commit would be to accept [Israel's] conditions for the release of [Palestinian] prisoners, either to the Gaza Strip (West Bank residents) or to exile in Europe," said the London-based newspaper. Hamas, it said, "must hold firm in its refusal to conditions and pressure exerted by Israel and the West, even if this leads to the collapse of the deal."

Prime Minister Binyamin Netanyahu was using "tough conditions" to try and lure the Palestinian side into making concessions demanded by "angry far-right parties that form the backbone of the [Israeli] coalition," the London-based paper asserted.

The report stated that Hamas was aware of the Israeli negotiating strategy and was therefore "insisting on its position and avoiding the need to make any concessions," both in terms of the number of prisoners to be freed and the conditions for their release.

The editorial called on the Palestinians to uphold the right of return by outright rejecting the notion of prisoners' expulsion "even if [it is the expulsion of] a small number of deportees, and even if it was conditional on a specific period of time."

Meanwhile on Wednesday morning Al-Hayat reported that negotiations between Israel and Hamas over the prisoner swap deal now hinged on seven Palestinian prisoners.

According to the pan-Arab newspaper, Israel still adamantly refuses to release Tanzim chief Marwan Barghouti, Café Moment and Sbarro terror mastermind Abdullah Barghouti and Popular Front for the Liberation of Palestine (PLF) secretary-general Ahmed Sa'adat, along with four other names on the list presented by Hamas.

The report stated, however, that the two sides have agreed on the release of 443 out of 450 of the prisoners demanded by the Hamas leadership in Gaza.

However, Al-Mustaqbal reported on Wednesday that Israel still refused to free nine prisoners whose release Hamas had demanded, among them Marwan Barghouti, Sa'adat, senior figures in Hamas's military wing and three female prisoners.

The UK-based paper, generally associated with Lebanon's Western-backed coalition, reported that Hamas has agreed to Israel's demand to expel 123 Palestinian prisoners from the West Bank. Ninety-seven of the prisoners, it said, would be expelled to the Gaza Strip, more than 20 of them to Qatar, and six to European countries that agreed to absorb them.

Quoting a source close to the talks, the report stressed that Hamas accepted the terms of release set by Israel only after ensuring that the prisoners were included in the agreement.