Israeli army officials have said that Palestinian prisoners who are not convicted of "terror activities" will be freed if a deal of swap is reached to bring about the release of a kidnapped Israeli soldier, local newspaper Ha'aretz reported on Monday.

However, the officials also said that they did not think Israel and the Palestinians were close to reaching such a deal.

The prisoners to be released are those who have not been involved in planning or carrying out "terror attacks", the officials were quoted as saying, adding that those "with blood on their hands" will not be set free.

They also said that the Israeli army would be willing to release Hamas ministers and legislators, as well as security prisoners jailed for relatively minor offenses, according to the report.

The army has formulated a draft deal to gain the release of the 19-year-old Corporal Gilad Shalit who was abducted by Palestinian militants on June 25 after days of discussion among Defense Minister Amir Peretz, Israel Defense Forces Chief of Staff Dan Halutz and top defense brass, said the report.

The draft deal also agrees to stop an ongoing broad military operation in Gaza in exchange for a halt to Palestinian militant rocket firing, attacks on Israeli troops and citizens and abductions, the report added.

The deal, meanwhile, reserves Israel's right to defense itself and to foil attacks by Palestinian militants, it said.

Earlier, Palestinian militants who held Shalit hostage set an early Tuesday ultimatum for Israel to meet their demands to release Palestinian women and minors and 1,000 prisoners in Israeli jails.

The militants also threatened unspecified consequences if Israel failed to do so.

Israel, however, has so far rejected a prisoner swap, insisting on the unconditional release of Shalit.

Israeli troops entered the Gaza Strip on June 28 in a bid to rescue the kidnapped Shalit.

It is the first major Israeli ground offensive in Gaza since Israel quit the desert coastal strip last summer after 38 years of occupation.

Meanwhile, Israeli troops launched a large-scale arrest campaign in the West Bank last week, detaining eight ministers of the Hamas-led Palestinian government and dozens of Hamas lawmakers.

Hamas' armed wing took part in the June 25 attack on an Israeli army post near the Gaza border during which Shalit was snatched.

But the Palestinian government led by Hamas, or the Islamic Resistance Movement, said it did not order the abduction and had no foreknowledge of the attack.

Source: Xinhua