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Israel denied a report that it has agreed to free jailed Fatah leader Marwan Barghouti in exchange for Gilad Shalit.

Al-Hayat, an Arabic newspaper published in London, reported Tuesday that Israeli Prime Minister Ehud Olmert has agreed to a Hamas demand to include Barghouti, who is serving five life sentences for five counts of murder, in a mass release of Palestinian prisoners. The deal would be part of an exchange for Shalit, the Israeli corporal who was kidnapped on the Gaza-Israel border in June 2006.

Several Israeli officials recently have called for clemency for Barghouti, a legislator from the relatively moderate Fatah faction, which is seen as a potential Palestinian counterweight to Hamas. But Olmert’s office denied that Barghouti, who was convicted of orchestrating terrorist attacks against Israelis, is a candidate for release.

“The issue is not on the agenda,” Olmert’s office said in a statement.

Hamas has demanded the release of more than 1,000 prisoners, including top terrorists, as ransom for Shalit. Israel is reviewing its criteria for such amnesties.

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