Sources familiar with the ongoing negotiations to free captured Israeli soldier Gilad Shalit tell Fox News that German mediators have told Hamas and the Israelis that they would like to see a breakthrough in the talks by Christmas.

Both sides are still grappling over the release of senior Palestinian prisoners including Marwan Barghouti, convicted by an Israeli court of killing four Israelis and a Greek monk. Israel does not want him to be released, but Hamas continues to push for him. Also outstanding remains whether to deport 40 Palestinian prisoners whom Israel does not want to return to the Palestinian territories.

This week German mediators presented Israel with proposals they hope might bridge the gap and that Israel might find acceptable.