Israel has offered to remove the economic embargo on Hamas if kidnapped IDF soldier Cpl. Gilad Schalit is freed and Kassam rocket attacks stop, the London-based Arabic newspaper Al-Hayat reported on Sunday morning.

The message was reportedly conveyed to the Islamic group via Arab mediators.

A Hamas source in the Gaza Strip was pessimistic about the seriousness of the proposal, telling Al-Hayat that it was an Israeli attempt to "put out the feelers" on the now Hamas-controlled Gaza Strip.

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