Israeli Prime Minister Ariel Sharon's inner cabinet has approved a proposal for a crossing to let Palestinians come and go between Egypt and Gaza following the Israeli withdrawal from Gaza.
The decision, which comes after pressure from the United States, was an important step toward freeing access to the Gaza Strip - seen internationally as vital for translating Israel's pullout from the occupied territory into a new chance for peacemaking.
Opening the Rafah crossing would mark the first time since Israel illegally captured the West Bank and Gaza Strip in 1967 that Palestinians would be allowed to enter and leave either territory without passing through Israeli military controls.
Under the plan accepted in Cairo last week by Israeli Defence Minister Shaul Mofaz, the foot crossing would be under foreign oversight to ease Israeli fears that arms and militants could easily cross into Gaza.
Details, including the possible role of European Union monitors, still have to be finalised with the Palestinians. The Egyptian-proposed plan also has to be approved by the full Israeli cabinet, probably on Sunday.