An Israeli-Palestinian agreement on Gaza border crossings is "in sight," US Secretary of State Condoleezza Rice said today.
She held separate meetings with leaders of both sides today.
Reducing restrictions on the movement of cargo from Gaza into Israel, and opening the border crossing between Gaza and Egypt are considered crucial to efforts to revive the economy of the impoverished coastal strip.
Israel and the Palestinians have been unable to seal a deal on the crossings since Israel pulled out of Gaza in September.
Israel wants to maintain tight security at the crossings to prevent militants and weapons from slipping through, while the Palestinians want to speed up the flow of goods to revitalise the economy and allow them freer movement.
International mediators presented a draft agreement on the crossings to Israeli and Palestinian officials late yesterday, with a request for rapid approval, an Israeli official said.
The proposal would include an Israeli commitment to allow 150 truckloads a day of Palestinian goods to pass through the Karni cargo crossing between Gaza and Israel, a large increase over the daily average of 35 trucks over the past six months.
At the Rafah crossing between Gaza and Egypt, negotiations reached a deadlock over whether Israel should be able to follow traffic via live closed circuit TV transmissions. The Palestinians have rejected the demand.
Under a compromise, the live pictures would be transmitted to a liaison office with Palestinian, Israeli and European representatives, with the Europeans put in charge.
Israel closed Rafah before leaving Gaza.
The draft deal also calls for a resumption of Palestinian movement - in bus convoys escorted by Israeli troops - between the West Bank and Gaza, starting on December 15th. The so-called "safe passage" was in place for about a year before Palestinian-Israeli violence erupted in late 2000.
"A lot of these are highly technical issues, a number are complicated issues," Ms Rice said of the compromise proposal circulated by international mediator James Wolfensohn.
"I believe that with will and some creativity, an agreement to what the envoy has proposed . . . as a way forward should be within sight."
AP