Tel Aviv  - Palestinian militants fired two Gaza-made rockets at southern Israel Monday, an Israeli military spokesman in Tel Aviv said.

One of the rockets landed near a kibbutz (agricultural commune), while the second had yet to be tracked down.

Another rocket was also fired at the area late Sunday.

The rocket fire - to which Israel has responded with sporadic air strikes since the end of the Gaza offensive in January - is continuing amid persistent local media reports that a double deal betweem Israel and the Islamist Hamas movement ruling Gaza may be near.

Israeli newspapers reported Monday that the Israeli cabinet is expected to convene Wednesday, and vote on a proposal that includes a truce and a prisoner-exchange deal with Hamas.

Both would be carried out in stages and include the opening of Gaza border crossings after the release of Gilad Shalit, an Israeli soldier captured in a Hamas-led, June 2006 cross border raid at an Israeli army outpost bordering Gaza and held captive in the strip since.

According to the reports, Shalit would first be handed over to Egypt until Israel fulfills its part of the deal, which includes the release of some 1,000 Palestinian prisoners, the vast majority of them Hamas militants, and many of them "with blood on their hands" - Israeli jargon for fighters involved in attacks against Israelis which resulted in deaths or injuries.

Israeli government spokesmen have refused to confirm or deny the reports.

Egypt has been mediating a truce deal between the two parties, which do not officially recognize each other, since Israel one month ago ended a deadly and destructive,
22-day offensive in Gaza, aimed at curbing rocket attacks from the strip at its southern population centres.

The offensive came after an earlier, six-month truce, also mediated by Egypt, disintegrated in early November. The emerging new agreement reportedly involves a truce of 18 months. (dpa)