Palestinian and Israeli officials today expressed widely different expectations for an upcoming summit between their leaders, reflecting the sharp differences that remain as the two sides try to end four years of hostilities and resume peace talks.

Palestinian leader Mahmoud Abbas and Israeli Prime Minister Ariel Sharon will hold their first summit during the second week of February, a senior Palestinian official said today.

PALESTINIAN Prime Minister Ahmed Quriea withdrew his resignation yesterday after Yasser Arafat granted him some power to carry out reforms, easing a paralysing leadership crisis, officials said.

The Israeli and Palestinian prime ministers have agreed to hold a long-delayed summit next Tuesday, their first meeting since the Palestinian leader took office in October.

ISRAELI troops yesterday killed an armed Palestinian as he tried to flee and blew up two houses of suspected militants in a nearby West Bank village, the military said. It was the second West Bank raid in as many days after a relative lull.

PALESTINIAN militants are sending “very positive” signals that they are ready for a ceasefire with Israel, a top aide to the Palestinian prime minister has said.

ISRAEL and the US appeared yesterday to have resigned themselves to pursuing peace with a new Palestinian government despite objecting to President Yasser Arafat’s continued clout in security affairs.

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.

VIOLENCE flared in Palestine yesterday as Israel said it planned to extend its security barrier into a new area of the West Bank, despite international pressure to stop construction.