Israel leaves Gaza town

DESPITE a wave of Palestinian suicide bombings, Israel relaxed its military grip yesterday in an area of the Gaza Strip where the first steps could be taken to fulfil a US-backed peace plan.

US President George W Bush telephoned new Palestinian Prime Minister Mahmoud Abbas yesterday and their first conversation was "friendly and hopeful," White House spokesman Ari Fleischer said.

"The president reiterated his vision ... for two states living side by side in peace and the president reiterated the absolute need for all parties to fight terror," Mr Fleischer told reporters.