Hamas leader Khaled Mashaal was expected to arrive in Cairo on Tuesday

As part of a third round of indirect negotiations with Israel over the release of Israeli occupation soldier Gilad Schalit, Hamas leader Khaled Mashaal was expected to arrive in Cairo on Tuesday, London-based Arabic-language newspaper Al-Hayat reported on Tuesday.

Palestinian sources said that Israel is being more flexible on issues that were previously rejected, according to the report.

One of the issues now on the table, sources told Al-Hayat, is the release of Israeli Arabs and east Jerusalem residents, which Israel had previously refused to discuss.

A senior Egyptian official told Al-Hayat Monday "It is not yet possible to talk about any breakthroughs in negotiations," but added optimistically that "there is a real willingness by both sides to move forward on the deal, and Israel is ready to pay the price for freeing Schalit."

The negotiations were reportedly taking place in an Egyptian intelligence complex, with Palestinians and Israelis meeting with Egyptian officials in separate rooms. Egyptian mediators would then carry messages from room to room in order to conduct negotiations.

A senior Hamas official said last week that his movement expects “positive developments” in efforts to achieve a prisoner swap with the Zionist entity in return for Schalit.

Musa Abu Marzouk, deputy head of the Damascus-based Hamas “political bureau,” said that his optimism was based on “internal pressure” on the Israeli government and changes in the makeup of the mediating team, Al-Hayat reported.