Israel also is continuing its month-long military offensive against Palestinian militants in the Gaza Strip in an attempt to free a captured Israeli soldier and stop rocket attacks on the Jewish state.
In Rome Thursday, Palestinian President Mahmoud Abbas said the release of the soldier, Corporal Gilad Shalit, could be imminent. He did not offer details.
Mr. Abbas said ongoing efforts "lead us to believe in an imminent solution."
But Palestinian negotiator Saeb Erakat called the President's comments premature. He said the Israeli soldier is alive and negotiations to free him are ongoing.
The armed wing of the militant Islamic group Hamas also responded. A spokesman said nothing has changed in the case of the Israeli soldier.
Palestinian medics say Israeli fire killed three Palestinian civilians in Gaza Thursday, including a 75-year-old woman. A tank shell hit her home near the Jabaliya refugee camp.
Mr. Abbas was speaking after talks with Italy's Prime Minister Romano Prodi.
The soldier's captors had demanded a release of Palestinian prisoners from Israeli jails.
On Wednesday, Israeli forces and Palestinian gunmen fought fierce battles across the Gaza Strip resulting in the deaths of 23 Palestinians, including three children.
More than 140 Palestinians have been killed in Gaza since Israeli forces moved into the Palestinian territory.
Some information for this report was provided by AP.