JERUSALEM, Jan. 1 (Xinhua) -- Israeli Prime Minister's Office denied on Monday morning that progress had been made in talks for the release of captured Israeli soldier Gilad Shalit, who has been held hostage since his abduction by Palestinian militants in late June.

    Israel has no intention of freeing 1,000 to 1,400 Palestinian prisoners in Israeli jails as reported by Arab media, said a statement issued by the PM office.

    The denial came after Prime Minister Ehud Olmert was briefed by Ofer Dekel, representative in the swap talks, over the Palestinian demands.

    On Sunday, Abu Obaida, spokesman for Hamas' armed wing Izz el-Deen al-Qassam Brigades, told Arab media that the prisoners' swap talks between Israel and the Palestinians achieved "a clear progress."

    The spokesman reiterated captors' demand for 1,000 Palestinian prisoners and 400 of women and youngsters in exchange for Shalit.

    However, the Palestinian demands were thought by Israeli side too high to be met.

    Israeli Foreign Affairs and Defense Committee Chairman Tzahi Hanegbi also said that he was not aware of any deal and he estimated that the Palestinian reports were part of the internal struggle between rival Palestinian groups Hamas and Fatah.

    "As far as I am aware, there is no breakthrough in talks to free him. It is media spin," Hanegbi was quoted by The Jerusalem Post as saying.

    "It appears that Hamas, in its power struggle with Palestinian (National) Authority Chairman Mahmoud Abbas, or out of a desire to raise the price of Gilad Shalit, is creating speculation," Hanegbi asserted.

    However, Hamas denied that they are raising the demands, saying that Israel had no choice but to accept them, according to Israel Radio.

    Earlier, London-based Arabic newspaper Al Sharq Al Awsat reported that Egyptian Intelligence Chief Omar Suleiman had presented the Hamas leaders with Israel's proposal to secure Shalit's release, in which an exchange would take place in three stages.

    Based on the proposal, Israel would firstly release 450 women and minors in exchange for proof that Shalit was alive.

    Then Shalit would be returned to Israel, and Israel would release 450 prisoners whose identity would be chosen by Shalit's captors.

    Finally, two months after Shalit's release, Israel would release another group of prisoners whose identity would be determined by the government.

    Shalit was seized by three Palestinian militant groups led by Izz el-Deen al-Qassam Brigades in a cross-border raid on June 25.