GAZA - Hamas signalled a willingness yesterday to negotiate over the list of Palestinian prisoners it wants Israel to release in exchange for a captive Israeli soldier, but ruled out major changes.

The fate of Corporal Gilad Shalit, seized by Gaza militants 10 months ago, is expected to dominate talks planned for Sunday between Israeli Prime Minister Ehud Olmert and Palestinian President Mahmoud Abbas.

Israeli leaders have rebuffed the prisoner list submitted by Hamas, which leads the Palestinian government, because it includes many militants deemed to have "blood on their hands" for attacks against Israelis.

But the Israeli government stopped short of rejecting the list outright and said it wanted to continue negotiations through Egyptian mediators to try to secure Shalit's release.

Sunday's talks will be the first between Olmert and Abbas since they agreed, during a visit to the region by US Secretary of State Condoleezza Rice last month, to meet every two weeks.

In a gesture to the Palestinians, the meeting may be held in the West Bank city of Jericho, though Olmert's office said no final decisions had been made.

Olmert has said Abbas's power-sharing partnership with Hamas Islamists and Shalit's captivity meant that no real progress towards Palestinian statehood could be made in their face-to-face meetings.

"It is patently clear that these will be tough and complicated negotiations," Israeli Defence Minister Amir Peretz said of the prisoner list submitted by Hamas.

Olmert held his first discussions about the list on Tuesday with Peretz and his top security advisers.

Israeli ministers at the meeting expressed "disappointment and reservation" about the list, the prime minister's office said. - Reuters