Exclusive – Fox News has learned that the prisoner exchange deal to release the kidnapped Israeli soldier, Gilad Shalit, has taken another important step toward finalizing.  However, a source in the Prime Minister’s office says, “This is not a done deal yet.”

The entire prisoner exchange deal involves releasing a total of 1000 Palestinian prisoners from Israeli Jails.  The hang up has always been 450 prisoners, specifically named by Hamas.  Last week, we reported that Israel rejected 70 of those names. Israel sent the names back to Hamas through German mediators.  Negotiators also sent criteria that a new list of names must meet in order for Israel to OK the release of those individuals.

We now can report that Israel received the new list of 70 names and indeed the individuals meet the criteria.

Hamas has already publicly expressed a desire to finalize the prisoner exchange by Friday, in time for the Muslim feast of Eid Al Adha.  That way the video of prisoners reuniting with their families amid great celebrations will play on Arab news channels and bolster the popularity of Hamas.

That explains why today Hamas announced an agreement on the part of all Palestinian factions in the Gaza Strip to halt the rocket fire.  The prisoner exchange deal is close but still very fragile. One rocket strike could cause it to fall apart.