Ehud Olmert, Israel's prime minister, is expected to discuss the fate of an Israeli soldier held by Palestinian group Hamas and a possible prisoner exchange with Hosni Mubarak, Egypt's president, later on Tuesday.

"The two leaders will discuss the situation in Gaza where Egypt played a crucial role in achieving the calm," Mark Regev, a spokesman for Olmert, said.

"This is a fragile situation and we want to talk about where this is going.

The ceasefire between Israel and Palestinian groups including Hamas, the largest Palestinian armed group, came into effect on Thursday.

Israeli forces have not entered the Hamas-ruled Gaza Strip since the truce took effect and has started to lift some restrictions on Gaza, easing the effects of a crippling economic blockade of the territory.

Egypt brokered the ceasefire deal between Israel and Hamas as Tel Aviv rejects direct contact with the Palestinian organisation.

Olmert criticised

Olmert has been criticised at home for not making the truce conditional upon Hamas releasing Gilad Shalit, a soldier captured in 2006 by Hamas.

The Israeli prime minister has said that the deal includes a commitment by Hamas to make progress towards Shalit's release.

Regev said: "The issue of Gilad Shalit will be raised.

"Both states have a joint interest in putting this issue behind us. Ultimately, we want to see the situation in Gaza stabilised."

Israel has also called for Egypt to help stop the smuggling of weapons from Egypt's Sinai peninsula into Gaza.

Ismail Haniya, a senior Hamas leader and former Palestinian prime minister, said on Monday that it was premature to judge whether the truce had been a success.

"It is too early to judge whether the occupation is adhering or not adhering to the understandings reached 10 days ago," Haniya said.

Haniya said his Hamas-run administration was "monitoring what is coming into the Gaza Strip and is in daily contact with our brothers in Egypt" to see that Israel eases its Gaza blockade.

West Bank violence

In the West Bank town of Nablus, which the ceasefire does not cover, Israeli troops shot dead two Palestinians on Tuesday.

Israeli troops killed the men in an exchange of fire, an Israeli military spokesman said, adding that one of them was a fighter from Islamic Jihad.

A mortar shell was also fired into Israeli territory from the Gaza Strip the previous evening, the Israeli army said, in the first such incident since the truce came into effect.

No one was hurt by the missile, which landed in the Nahal Oz area after being launched from the central Gaza Strip, officials said on Tuesday.

"We are familiar with a mortar shell that landed near the security fence in northern Gaza on the Israeli side," an army spokeswoman said.

There has been no claim of responsibility for the reported incident on Monday evening, nor any confimation from Palestinian sources that such an incident took place.

Agencies