Israel may free inmates linked to killings -source

JERUSALEM, Nov 30 (Reuters) Israel is considering the release of Palestinians jailed in connection with deadly militant attacks as part of efforts to recover a soldier held captive in Gaza, an Israeli political source said today.

Israel has long balked at freeing prisoners described as having ''blood on their hands'', citing fears of a backlash in the Jewish state.

But the political source said that Israeli officials were discussing whether to soften that stand in order to retrieve Corporal Gilad Shalit, who was seized by Palestinian gunmen outside the Gaza Strip on June 25.

The source said there was still no question of freeing Palestinians convicted of killing Israelis themselves.

''We are talking about Palestinians who, say, drove suicide bombers to their targets or provided other support. Another category is terrorists who were captured before they could carry out attacks.

This is unprecedented,'' the source said.

''The term 'blood on their hands' cover a wide range of prisoners. We are not talking about amnesty for everyone.'' Shalit's captors, including the armed wing of the governing Hamas Islamist group, want to swap him for a mass release of Palestinian prisoners. Hamas negotiators have demanded that Israel release 1,400 of an estimated 8,000-10,000 Palestinians held in its jails.

The Hamas list includes women, minors, elderly and sickly prisoners, as well as leaders of armed factions spearheading an uprising that erupted in 2000.

Israel had at first ruled out any exchange for Shalit and launched several bloody military raids into Gaza, a territory it had quit in 2005 after 38 years of occupation. Palestinian militants in Gaza stepped up cross-border rocket salvoes.

But Israeli Prime Minister Ehud Olmert signalled a turnaround this week when a truce took hold in Gaza.

He announced that, once Shalit were freed, he would be willing to release ''many'' Palestinian prisoners, including those sentenced to long terms.

The mass-circulation Israeli newspaper Maariv, in a report that cited two unnamed cabinet ministers, said that Israel expected to release a total of 500 prisoners for Shalit.

These would include a small number of Palestinians ''with blood on their hands'', mostly inmates who had served over 20 years behind bars or who were nearing their release date, Maariv said.

Reuters AB VV1523