Israeli officials would neither confirm nor deny the reports.

Yassin, 61, was released from an Israeli prison before daybreak Wednesday and flown by helicopter to Jordan.

The Muslim cleric, who uses a wheelchair, was jailed in 1989. He had been serving a life sentence for ordering the deaths of Palestinians suspected of collaborating with Israel.

While in prison, Yassin moderated his positions, calling on his followers for an end to terrorist attacks in Israel. According to some observers, his change of position was at least partly intended to help win his release.

Hamas leaders initially condemned Yassin's transfer to Jordan, but welcomed the move Wednesday after they were reportedly assured by King Hussein that he would be allowed to return to his home in the Gaza Strip.

But it remained unclear whether Israel would indeed allow him to return home.

According to Palestinian sources quoted by Israeli media, Yassin was freed in exchange for the release of two Mossad agents who on Sept. 25 allegedly attempted to kill another Hamas leader, Khaled Mashaal, in the Jordanian capital of Amman.

Jordanian officials, who initially dismissed the incident as a minor street scuffle, arrested two men carrying Canadian passports. The two had refused the help of the Canadian Embassy in Amman.

Hussein made an angry phone call to Prime Minister Benjamin Netanyahu to protest the attack on Mashaal, the Israeli daily Yediot Achronot reported.

Jordan's Crown Prince Hassan visited Israel secretly on Sunday to arrange the swap, according to Israel Radio.

Israeli government spokesman Moshe Fogel refused comment on Yassin's release and the reported swap.

Yassin's release was welcomed by American officials, with White House spokesman Mike McCurry calling it a "humanitarian gesture taken by the government of Israel that we hope will improve the climate for further discussions related to the peace process."

Palestinian Authority Chairman Yasser Arafat also welcomed the move.

"God willing, it will be the beginning of the release of all prisoners who are still in Israeli and Zionist prisons," he said.

Israel still holds more than 3,600 Palestinian prisoners, according to reports of Israeli figures.

In another development, Israeli President Ezer Weizman pardoned or reduced the sentences of six Israelis jailed for attacks on Arabs.

Weizman made the decision three months ago and it was not related to the release of Yassin, Israel Radio reported.