Issa Qaraqe, minister of prisoner affairs, said Wednesday former Fatah leader Marwan Barghouti and Ahmad Saadat, secretary-general of the Popular Front for the Liberation of Palestine, both refused to be deported outside the Palestinian territories, al-Quds said.
Qaraqe said the German mediated negotiations for a pending prisoner swap has reached the advanced stages, but the main obstacle remains Israel's insistence on deporting 12 Palestinian prisoners, including Barghouti and Saadat, the newspaper said.
Israel has said it is willing to free the two Palestinian leaders on the condition Barghouti is deported, al-Hayat said.
Barghouti, 50, a former politician, was arrested in 2002 and is currently serving five consecutive life sentences for his role in terror attacks in which scores of Israelis were killed.
The Saadat, 55, was taken into Israeli custody in 2006, for his role in the murder of former Israeli Minister of Tourism Rehavam Zeevi in October 2001.
In June 2006 Shalit was on operational duty near the Gaza border when he was abducted and taken to Gaza where he has been held captive ever since.