Israel and the Palestinians have reached an agreement for Israeli troops to withdraw from the West Bank town of Bethlehem on Saturday if the area is calm.
Israeli and Palestinian security officials agreed that Israeli forces will pull back from positions in Bethlehem and the adjacent village of Beit Jala Saturday night if the Palestinian Authority maintains quiet in the area.
A meeting of field commanders from both sides will be held Saturday to finalize the withdrawal.
Israel invaded six Palestinian-ruled towns in the West Bank last week following the assassination of cabinet minister Rehavam Ze'evi. Dozens of Palestinians have been killed in Israeli military raids since the assassination.
The Israeli defense ministry says another meeting will be held Sunday to discuss the withdrawal from other areas.
Israeli Foreign Minister Shimon Peres says both sides need to start talking and stop shooting. "We are trying to see again if we can have some openings to return to the negotiations for a cease-fire that eventually will lead to the negotiations for a permanent settlement in the Middle East," he said.
The Jewish state has been under intense pressure from the United States and other countries to end the incursions.
German Foreign Minister Joschka Fischer, who met with Mr. Peres and Palestinian leader Yasser Arafat, says last month's terrorist attacks on New York and Washington should have a positive impact on the conflict in the Middle East.
"We are working very hard to come to an end of terror and violence, to open the door back to negotiations based on the end of terror and violence. I think this is very important and what we can contribute we will contribute," said Mr. Fischer. "But once again I think it is very important to understand the world has changed since September 11 for all of us."
The United States has been trying to bring down the violence in the Middle East as it recruits Arab and Islamic nations into its international anti-terror coalition.
Despite ongoing diplomatic efforts, violence continued Friday as Israeli soldiers shot and killed three armed Palestinians in the Gaza Strip who were trying to infiltrate a Jewish settlement.
The militant Islamic group Hamas claimed responsibility for the attempted attack.