Israel said on Monday there was no deal yet on a prisoner swap with Hamas, as efforts appeared to gather pace on an accord that could see a Gaza-held soldier exchanged for hundreds of Palestinians.

"There is no deal yet," Israeli Prime Minister Benjamin Netanyahu told deputies from his right-wing Likud party, an official present at the meeting said.

"The question will be decided by the government and there will be a debate in the Knesset," he said, referring to parliament.

He spoke amid growing rumours in Israel, Gaza and Egypt that a deal was imminent in German-mediated talks to swap Gilad Shalit, seized by Gaza militants in 2006, for hundreds of Palestinian prisoners.

A day after Israeli President Shimon Peres spoke of "progress" in the talks, Shalit's parents met senior officials and a Hamas delegation arrived in Egypt, a key player over months of indirect talks.