Meanwhile, Prime Minister Benjamin Netanyahu denied reports Sunday that his government had dropped its hardline refusal to free Palestinians jailed for carrying out attacks on Israelis. Speaking during a cabinet meeting, Netanyahu said he would never order the release of Palestinians who either wounded or killed Israelis, because we have not changed our criteria for freeing security prisoners." But Netanyahu acknowledged that his government was considering freeing some Palestinian detainees as a goodwill gesture for the Muslim feast of the sacrifice, Al-Adha, which falls this year on March 27, his office said.

The prisoner issue is one of the most emotional for the Palestinians and Israel's refusal to release detainees sparked widespread rioting in the occupied territories last year which in turn contributed to the breakdown of the Wye River Peace Accord. Netanyahu was responding to a newspaper report that Israeli and Palestinian officials have secretly worked out a compromise deal to release 100 Palestinians political prisoners.

The Yediot Aharonot newspaper reported that Israel had agreed to ease its stance and would release some Palestinians convicted of involvement in attacks in which Israelis were hurt but not killed. Those released were to be members of PLO chief Yasser Arafat's Fatah movement who have spent more than 10 years in jail and served at least two-thirds of their sentences, the newspaper said.

Yediot said Israeli Internal Security Minister Avigdor Kahalani negotiated the compromise with PLO Deputy Leader Mahmud Abbas and chief peace negotiator Saeb Erakat and was currently finalizing the list of releasable prisoners. Kahalani's office declined to either confirm or deny the report, and there was no immediate comment from the Palestinian authority. Palestinian sources estimate that around 3,000 Palestinians are held in Israeli jails and some 2,000 of these were convicted of politically motivated crimes, most of them committed before the first Israeli-PLO Peace Accord was signed in 1993. The Palestinians say barely 200 of the prisoners actually killed Israelis and the majority were not directly involved in bloody actions but belonged to groups behind such attacks.

Under the Wye River Interim Peace Accord signed last October in Washington, Israel agreed to release 750 Palestinian prisoners in three batches to coincide with staged further withdrawals from the West Bank. Israel released a first group of 250 prisoners in tandem with a first troop pullback in November, but only 100 of them were political detainees and the rest common criminals.

Netanyahu's hardline on the issue triggered three weeks of violence across the West Bank at the end of last year in which four Palestinians were killed and scores injured. (AFP)