Exclusive to Fox News – The pieces are falling in place to strike a deal that will free the kidnapped Israeli soldier, Gilad Shalit.

Shalit was kidnapped when Palestinian militants dug a tunnel underneath the Israeli-Gaza border on June 25, 2006. It was a violent, cross border raid that killed two of Shalit’s fellow soldiers. He has been in Hamas captivity ever since.

Hamas has been demanding the release of 1,000 prisoners total, in exchange for Shalit. But the hang up has been over 450 specifically named prisoners. Many of them are prisoners Israel labeled as having “blood on their hands,” meaning they have participated in violent attacks against Israelis.

A source tells Fox News that Israel has rejected 70 out of the 450 specific names. Israeli negotiators told German mediators those prisoners would remain in behind bars, even if it means Shalit remains a hostage.

The source says Hamas responded with 70 new names, which are on their way to be reviewed by Israeli negotiators.

Hamas has already indicated an intention to finish the prisoner exchange by November 27, in time for the Muslim holiday Eid Al Adha.

Once an agreement has been reached on the details of the prisoner exchange, Hamas will first hand Shalit over to Egypt. President Hosni Mubarak will be personally tasked with securing Shalit’s safety.  Israel will release the prisoners. Only then will Shalit be returned to Israel to re-unite with his family after more than 3 years captivity in the Gaza strip.