Israeli forces are reported to have pulled back some distance from the area surrounding the compound of the Palestinian leader Yasser Arafat in the West Bank town of Ramallah.
There are also reports that the army has left two villages near Ramallah. An Israeli official said it was the beginning of a momentum to reduce the tension.
In a separate development, the Palestinian leader is expected to try to leave for Bethlehem before Christmas. Yasser Arafat has been confined to the West Bank city of Ramallah because of military action by Israel.
The Israelis say they are willing to consider any request by Mr Arafat to move out of his headquarters.
Meanwhile, the militant Palestinian group, Hamas, has denied reports that the organisation is considering a halt to its suicide bombing campaign against Israel.
The comment by a senior official of the group, Sheikh Hassan Yousef, came three days after a call by Mr Arafat for military operations against Israelis to stop.
