RAMALLAH, West Bank, (AP)- Israel is reviewing a list of hundreds of Palestinians prisoners that Gaza militants want released in exchange for a captured Israeli soldier, an official and media reports said Sunday, in a sign of potential progress in the 10-month standoff over a deal.

The release of Israeli Cpl. Gilad Shalit is a precondition for any possible progress in Israeli-Palestinian peace efforts. A swap could also help the new Palestinian unity government, a coalition of the Islamic militant Hamas and the moderate Fatah movements, in its quest for international acceptance.

There were conflicting reports on the captors’ demands. Some said the list contained close to 500 names, while others said there were twice as many. A Palestinian close to the negotiations was told that among those on the list is Palestinian uprising leader Marwan Barghouti, who is serving five consecutive life terms for his role in shooting attacks that killed four Israelis and a Greek monk.

Hamas-allied militants, who seized Shalit on June 25, handed the list to Egyptian mediators who delivered it to Israel in recent days.

Israel’s Shin Bet security service is reviewing the list and will give its recommendations to Prime Minister Ehud Olmert in coming days, the Yediot Ahronot daily reported Sunday. An Israeli security official, speaking on condition of anonymity because he was not authorized to speak to the media, confirmed the review was under way.

Shalit’s captors, who snatched the soldier in a raid into Israel, initially demanded the release of 1,400 Palestinian prisoners, including women, minors and dozens of the longest-serving inmates. Israel balked at freeing those involved in attacks the wounded or killed Israelis.

In all, some 9,300 Palestinian security prisoners are being held by Israel, one of the highest totals in 40 years of Israeli military occupation.

On Saturday, Palestinian Information Minister Mustafa Barghouti announced that Shalit’s captors presented the list of names they wanted freed and that it was handed to Israel by Egyptian mediators. “If the Israeli government is serious, there is now a very good opportunity to end this chapter,” said Barghouti, a distant relative of Marwan Barghouti, the uprising leader.

Ghazi Hamad, a Hamas spokesman, also said progress has been made.

Israeli Cabinet Minister Yitzhak Herzog told Israel Army Radio said he was not involved in the negotiations, but that “I imagine that there is a certain progress, compared to what there has been until now.”

“On the other hand I would be very wary … because there is still a long way to go,” he said.

Also Saturday, an Israeli airstrike in Gaza killed a Palestinian militant and wounded two. The Israeli military said it launched the strike after spotting the militants trying to plant a bomb. It said militants had planted explosives in the same area two days earlier.

The army said militants have planted more than 40 bombs along the border since Palestinian militants in Gaza and Israel agreed on a cease-fire in November.

The Democratic Front for the Liberation of Palestine, a small militant group, said the militants were “on a holy mission” when they were hit by the Israeli force.

Israel says militants have been exploiting the lull to smuggle explosives, missiles and other weapons into Gaza through tunnels from neighboring Egypt.

During the truce, Palestinian militants have fired some 200 rockets into Israel, the army said, including two on Saturday. One of the rockets caused light damage to a building in the border town of Sderot, a common target of the militants. The army said there were no injuries.

The Palestinian news agency WAFA quoted Palestinian President Mahmoud Abbas as telling newly graduating members of his presidential guard Saturday that they and members of the other Palestinian security forces must work together to put a halt to the rocket fire, saying it was “against the national interest.”