Israel on Wednesday decided to release 20 Palestinian women in its prisons in exchange for information on kidnapped Israeli soldier Gilad Shalit.

Israel's powerful security cabinet reached the decision "according to a proposal of the team responsible for negotiating the release of Gilad Shalit," said the Prime Minister's Office in a communique.

"According to the mediators' proposal, Israel will receive updated and unequivocal proof regarding the well-being and status of Gilad Shalit. Proof that he is alive will be delivered to Israel by the mediators in the form of a recently recorded video tape," added the communique.

Local media quoted Israeli sources as saying that German mediators have already viewed the video, which is believed to be recorded in recent weeks.

Israel has received information of the video's content, which shows that Shalit appears to be alive and well, according to local reports.

The move marks a dramatic development concerning the fate of Shalit, who was taken away three years ago by Palestinian militants from the Gaza Strip and is believed to be hidden somewhere inside Gaza.

The Gaza-ruling Hamas movement asked Israel to release more than 1,000 Palestinians, including some specifically identified, from its prisons in exchange for the freedom of Shalit. Yet gaps between the two sides have stalled negotiations mediated by Egypt and Germany on a possible swap deal.

"The Security Cabinet decided to respond to the Egyptian initiative as a confidence-building measure in the framework of the indirect negotiations.