Israel has agreed to stop hunting up to 180 wanted Fatah militants who pledge to end attacks against the Jewish state, in an effort to bolster Palestinian President Mahmoud Abbas.
Israeli officials said Prime Minister Ehud Olmert is expected to meet Mr Abbas tomorrow, most likely in Jerusalem, as part of efforts to try to revive long-stalled peace talks after Hamas's violent takeover of the Gaza Strip last month.
In addition to the reprieve for Fatah militants, Israel said it agreed to Mr Abbas's request to allow Nayef Hawatmeh, the Damascus-based leader of the Democratic Front for the Liberation of Palestine (DFLP), to visit the occupied West Bank.
Mr Hawatmeh's group carried out dramatic attacks against Israel in the 1970s but has scaled back its activities in recent years.
Mr Olmert will also give Mr Abbas a finalised list of some 250 prisoners who will be released from Israeli jails.
An official in Mr Olmert's office said about 85 per cent of the Palestinians to be released will be from Fatah. The rest will come from non-Islamist groups, including the DFLP.
Israeli cabinet minister Isaac Herzog described the steps as "difficult".
Israeli officials said their goal was to strengthen Mr Abbas, who dismissed a Hamas-led government after the Islamist group seized control of Gaza in a week of bloody fighting last month.
Mr Abbas formed a new government in the occupied West Bank, where his secular Fatah faction remains dominant, over Hamas's opposition.
"The security forces have reached an agreement that the terrorists who will openly renounce terrorism will be taken off the Israeli wanted list and will not be pursued if they do not take part in any way in terrorism," an Israeli official said.
Leaders of the al-Aqsa Martyrs Brigades, an offshoot of Fatah, said militants granted the reprieve would sign commitments not to attack Israeli forces or civilians. Israel would review the reprieves after three months.