Israel this afternoon returned Jericho to Palestinian security control after pulling back troops from the symbolically important West Bank city.
The pullback should strengthen the hand of Palestinian leader Mahmoud Abbas as he seeks to get militants to agree a formal ceasefire to end 4 1/2-years of armed conflict so that he can start talks with Israel.
Israeli soldiers remove an Israeli flag during the dismantling of an army checkpoint in the West Bank city of Jericho today
The move, delayed for weeks by wrangling over the scale of a more wide-ranging withdrawal from West Bank cities, is an important confidence-building step as Israeli Prime Minister Ariel Sharon attempts to bolster new Palestinian leader Mahmoud Abbas.
Mr Abbas has succeeded in quelling violence from Palestinian militants aimed at Israelis, though some attacks still continue. Tel Aviv says the attacks will need to stop entirely if a tentative peace deal agreed in last month is to be put on a more formal footing.
Today's deal permits armed Palestinian police to operate with an obligation to keep militants in check. In return, Israel agreed to end arrest raids and ease crippling restrictions on movement of the region's 40,000 inhabitants.
Some flashed V-for-victory signs and sat down to picnics in the biblical oasis town as soldiers loaded concrete blocks used for checkpoints onto trucks and pulled away.
Others were disappointed Israel had not lifted a security ban on its citizens entering Jericho to go to its casino, the area's main money-spinner during the relatively peaceful 1990s.
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But Israeli soldiers have retained control over the nearby Jordan Valley transit highway used by many Israelis.
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Mr Sharon pledged to move troops away from four other cities - Tulkarm, Ramallah, Qalqilya and Bethlehem - if Palestinian police succeed in maintaining security in Jericho.
, sceptical of the Palestinians' ability to rein in militants, insisted the handovers start in Jericho because it has been largely calm throughout a 4-year Palestinian revolt. 's handover eases a military encirclement of Jericho, allowing residents to travel freely to other towns in the region as well as farther afield to Ramallah, the hub of Palestinian government and commerce in the central West Bank.