Israel has agreed to hand over the West Bank cities of Jericho and Tulkarm to Palestinians, according to Israeli Army Radio.
The radio said Defence Minister Shaul Mofaz had agreed in a meeting with Palestinian Interior Minister Nasser Youssef to pull Israeli troops away from Jericho on Wednesday.
It said Tulkarm would be handed over early next week.
Earlier today, UN Secretary-General Kofi Annan met Palestinian President Mahmoud Abbas and said the world was determined to nurture Middle East peace moves after years of stalemate.
Palestinian militant chiefs said they were ready for a formal ceasefire if Israel freed 8,000 prisoners and pulled back forces in the occupied West Bank.
Mr Abbas said he expected to win militants over to a formal truce, cementing a tacit deal prone to violations, in talks with them tomorrow in Cairo.
'We hope the dialogue in Cairo will yield positive results because the conditions are right among all parties concerned,' he told reporters in the West Bank city of Ramallah.
