Israel has allowed the reopening of the Jerusalem offices of a leading Palestinian moderate. At the same time, the government began transferring funds to the Palestinian Authority it had frozen, and Palestinians said that Foreign Minister Mr Shimon Peres had indicated that Israel would be ready to withdraw its troops from two West Bank towns.
After ordering the closure of the offices of Al Quds University president Mr Sari Nusseibeh two weeks ago on the grounds they were being used as an arm of the Palestinian Authority - a move that sparked broad international criticism, including a rare rebuke from the United States - Public Security Minister Mr Uzi Landau ordered them reopened yesterday.
The university is located in East Jerusalem, which the Palestinians view as a future capital of an independent state. Mr Landau lifted the ban after Mr Nusseibeh, who is the PLO's top political representative in Jerusalem and is considered one of the Palestinian figures closest to the present US administration, signed a written pledge not to allow any Palestinian Authority activity on the campus and not to undertake any Jerusalem-related activity from his offices.
The international community had been angered by what it viewed as Israel's censuring of a voice of moderation on the Palestinian side. Over the last nine months, Mr Nusseibeh has both hinted that Palestinians might have to ultimately give up on the right of return of refugees, has criticised the use of suicide bombings, arguing that it harms Palestinian interests, and has encouraged a non-violent path to statehood. But he made it clear he would not halt his PLO activity in Jerusalem.
On the ground, violence continued with two Islamic Jihad militants killed and two Israeli soldiers lightly injured in a gun-battle near the Gush Katif bloc of Jewish settlements in the Gaza Strip.
Amid international pressure on both sides to renew talks, Mr Peres announced that the government had released $20 million in Palestinian tax revenues frozen by Israel after the uprising erupted in September 2000, and which were passed on to the PA under peace deals. Palestinian officials have complained that the withholding of hundreds of millions of dollars in revenues has worsened the plight of their people. Prime Minister Mr Ariel Sharon had reportedly made the freeing of impounded revenues conditional on the creation of a US-supervised mechanism to monitor the disbursement of funds to ensure they did not reach Palestinian Authority Chairman Mr Yasser Arafat.
Since Saturday - when the first high-level interaction between the two sides took place - Palestinian Authority officials have quoted Mr Peres as having told them that Israel was willing to withdraw its troops from the West Bank cities of Hebron and Bethlehem by last night, if there were no terror attacks during the 48-hour period.