Israeli Prime Minister Ehud Olmert is willing to release 450 Palestinian prisoners in exchange for a soldier held by militants in the Gaza Strip, a newspaper reported on Friday.

Olmert has asked the five ministers, dealing with the proposed swap with Hamas, to draw up the list, which would increase from about 80 the number of prisoners Israel is willing to release in exchange for Gilad Shalit.

The Israeli corporal, who turned 22 on Wednesday, was captured in a deadly cross-border raid from Gaza in June 2006 and is believed to be held by Hamas,the Islamist movement which rules the tiny Palestinian territory.

Olmert's spokesman Mark Regev would not confirm or deny the report. "Giving such information does not facilitate his release," he said.

Israel and Hamas have been holding indirect negotiations through Egyptian mediators on a deal to exchange Shalit for Palestinians held in Israeli prisons.

Israel blacklists Hamas a terrorist organisation, but the two sides agreed on June 19 to a truce in Gaza, also through Egyptian mediation.

Hamas, the Islamic Resistance Movement, violently seized power in Gaza in June 2007, routing forces loyal to secular Palestinian president Mahmud Abbas who now only holds sway in the West Bank.