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Hamas denied receiving "anything new" in the way of a proposal from Israel that would win the release of kidnapped soldier Gilad Shalit. But outgoing Prime Minister Ehud Olmert called his negotiators' efforts to bring Shalit home by Sunday night "enormous [and] unprecedented," more than likely in exchange for the freeing of hundreds of Palestinians from Israeli jails. If they fail, Olmert's successor, Benjamin Netanyahu, can be expected to set much tougher terms for any deal, analysts said.

Netanyahu has reopened discussions on formation of a unity government with his main rival, the Kadima Party of Foreign Minister Tzipi Livni, the Jerusalem Post reported Sunday. It said Livni would insist on remaining in charge of foreign policy if she were to join a new government and would seek a compromise on rotation of the premiership. Netanyahu appears to be finalizing a narrow coalition with the right-wing Israel Beiteinu Party but it would become broader if Kadima joined.


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