Militants offer new conditions on Gaza standoff-source

GAZA, July 5 (Reuters) Palestinian militants are ready to release a captive Israeli soldier if Israel sets a timetable for freeing some prisoners, a Palestinian source close to negotiations with Egyptian mediators said today.

Such a proposal would indicate an apparent softening of the stand of the militants holding Corporal Gilad Shalit, captured during a cross border raid on June 25.

But the source said Israel had told the Egyptians it still rejected such a proposal and has said only that it might free some prisoners by the end of the year without any firm promises.

There was no immediate comment from either the militants or Israel.

REUTERS SHB BD2349