Israeli and Palestinian officials say Israel has agreed to allow about 55 exiled Palestinians to return to the West Bank.
An Israeli official Saturday said a condition of the deal is that the returnees will refrain from terrorist activities. The deal could be implemented in two weeks.
Israel expelled the Palestinians to the Gaza Strip and Europe for alleged terror links. Some were involved in the siege of the Church of the Nativity in Bethlehem in 2002.
Saturday's announcement comes as Palestinian leader Mahmoud Abbas is in the Gaza Strip to meet with militants to demand that they abide by a cease-fire with Israel. The cease-fire was announced Tuesday at a summit in Egypt with Israeli Prime Minister Ariel Sharon.
On Thursday, Hamas militants fired a barrage of rockets and mortars into Jewish settlements in Gaza. No casualties were reported. In response, Mr. Abbas fired several senior officials, including his public security chief.
Some information for this report provided by AFP and AP.