Hamas has not ruled out a prisoner exchange with Israel, one of the movements top leaders said upon returning from talks on the issue in Damascus.

Hamas leader Mahmoud Zahhar told Ma’an, “Hamas did not close the door on the Shalit deal.

Hamas is demanding that Israel release some 1,000 Palestinian prisoners in return for Gilad Shalit, an Israeli soldier held in Gaza.

Zahhar said Hamas is still holding internal consultations on the prisoner deal, and other issues, including reconciliation with Fatah, and the steel wall Egypt is building on the border with Gaza.

He said the wall issue had been raised with the Egyptian government.

Zahhar returned to Gaza on Thursday via the Rafah border crossing along with Hamas officials Khalil Al-Haya and Nezar Awad Allah.

Earlier, Reuters news agency reported that Hamas rejected Israel’s terms for a swap in a message relayed to a German mediator on Wednesday night.

The terms, according to recent reports, were to have approximately 100 of the 450 named prisoners whose release is a condition of the swap, sent to the Gaza Strip or elsewhere in the Middle East, effectively exiling the men and women from their places of origin.

Hamas officials, however, told the mediator they were willing to continue talks and asked to start a fresh round of mediated talks next week, Reuters reported.

The reply came after Hamas officials met in Damascus to form a final decision on the Israeli offer.

"The consultations will continue and the negotiations will continue. We cannot say that the deal has reached a dead end. And we cannot say that (the talks were) concluded by a deal," Hamas leader Ayman Taha told Reuters.

Also on Thursday the pan-Arab daily Al-Hayat reported that Israel is still refusing to release 22 senior Palestinian prisoners, including Fatah leader Marwan Barghouthi, Popular Front for the Liberation of Palestine (PFLP) leader Ahmad Sa’adat, and two of the leaders of Hamas' military wing in the West Bank, Ibrahim Hamad and Abdullah Barghouthi.

In addition, Israel is refusing to free another 15 accused militants from the West Bank, seven from Gaza, 44 from East Jerusalem, and 20 Palestinians living inside Israel.