Palestinian officials said today they have reached a tentative agreement to absorb about 700 gunmen in the West Bank city of Nablus into the Palestinian security services, pushing forward with a campaign aimed at disarming rogue militants roaming the Palestinian areas.

An Israeli soldier and a Palestinian fugitive were killed in a West Bank shoot-out today, part of a marked increase in tension in recent weeks despite a three-month-old truce.

Palestinian leader Mahmoud Abbas said today he expects Hamas to hand in its weapons after Palestinian elections this summer, but he stopped short of threatening to disarm the Islamic militants by force.

A Jewish settler leader in the Gaza Strip said today that settlers would comply with a Defence Ministry order to return army-issue weapons to the military, defusing a potentially serious problem ahead of this summer’s planned Israeli evacuation of the volatile territory.

Palestinian leader Mahmoud Abbas has ordered the disparate Palestinian security services to come under the authority of three main institutions – a step toward meeting a key Israeli and US demand for reform.

Prime Minister Ahmed Qureia will remain in his job at Yasser Arafat’s insistence, a Cabinet minister said today, ending a political crisis in the Palestinian government.

PRESIDENT Yasser Arafat extended the term of a Palestinian emergency government yesterday in a sign he expected a power struggle with his prime minister to delay creation of a new cabinet.

Palestinian parliament speaker Ahmed Qureia emerged as Yasser Arafat’s choice to take over as prime minister following the resignation of Mahmoud Abbas, Palestinian officials said.

The US State Department criticised Israeli and Palestinian authorities for widespread abuses in their conflict, and denounced China for what it said was a long list of rights violations.

Israeli troops seized suspected Palestinian weapons-makers in the deepest incursion into Gaza City in two years today and surrounded the West Bank hideout of the alleged mastermind of a shooting attack on a kibbutz.

The Israeli army has blocked the main north-south road in the Palestinian-ruled Gaza Strip, effectively barring civilians from moving between the northern and southern areas.

Israeli tanks rolled into the West Bank city of Hebron early today, just as Israel’s large-scale military operation in the West Bank appeared to be drawing to a close.

Palestinian negotiators suggest the gunmen sheltering in the sacred Church of the Nativity should be taken to the Gaza Strip.