The ongoing negotiations, which Qatar has been conducting in coordination with the United States since Saturday night, are “moving positively” said the source, who has been briefed on them.
But there are no signs of breakthroughs as both sides dig in.
Qatar has been in touch with Hamas officials in Doha and Gaza, the source said, after the Islamist group assaulted Israel from Gaza on Saturday, storming into towns, killing more than 700 Israelis, and escaping with dozens of hostages.
The exact number of Israeli women and children hostages Hamas is offering in the potential exchange of 36 Palestinian women and children prisoners the Islamist group identified is not clear, the source said.
Details about negotiations focusing on the release of 36 Palestinians from Israeli jails have not previously been reported.
The number of Israeli hostages held in Gaza also remains unclear, but it is widely believed that Hamas seized women, children, elderly people and soldiers on Saturday.
A Palestinian official, familiar with mediation efforts with Hamas and Israel in the past, told Reuters that Qatar and Egypt have been in contact with the group but the intensity of the fighting cast shadows over any potential breakthrough.
In Hamas-controlled Gaza, Israel has carried out its most intensive retaliatory strikes ever, killing some 500 people since Saturday. Defence Minister Yoav Gallant said Israel’s blockade would be tightened to prevent food and fuel from being brought into the strip, home to 2.3 million people.
Egypt has been in close contact with Israel and Hamas to try to prevent further escalation in fighting between them and to ensure the protection of the Israeli hostages, two Egyptian security sources said.
Egypt had urged Israel to exercise restraint and Hamas to hold its captives in good condition to keep open the possibility of de-escalation soon, although Israeli strikes on the Gaza Strip made mediation difficult, the Egyptian sources said, speaking on condition of anonymity.
The source who had been briefed on the Qatar-led talks, also speaking on condition of anonymity, told Reuters: “There has been no agreement on logistics or a mechanism for the release.”
There was no immediate response to requests for comment sent to Qatar’s foreign ministry, Hamas or the U.S. State Department. Israel’s prime minister’s office said it did not wish to comment.
Israelis are reeling from the assault and by images of captured fellow citizens being bundled into Gaza. Israel has said it will act to free the hostages, adhering to a longstanding principle of leaving no prisoner behind.
However, Prime Minister Benjamin Netanyahu’s options for hitting Hamas over its incursion into Israel could be reined in by concern for the many Israelis seized in the raid, as a nation scarred by past hostage crises faces perhaps its worst one yet.
Qatar, a tiny but wealthy energy and investment powerhouse that holds ambitious foreign policy goals, has a direct line of communication with Hamas. Qatari envoys have previously helped mediate truces between the Islamist group and Israel.
Doha has recently been under the global diplomacy spotlight, after hosting more than a year of talks between the United States and Iran, which led to prisoner exchanges and fund releases.
While Hamas’ power base is in Gaza, some leaders are based in Qatar as well as other Middle Eastern countries.
By Andrew Mills and Nidal al-Mughrabi
(Reporting by Andrew Mills in Doha and Nidal al-Mughrabi in Gaza with additional reporting by James Mackenzie in Jerusalem and Ahmed Mohamed Hassan in Cairo; Writing by Andrew Mills; Editing by Michael Georgy and Angus MacSwan)