Israel Friday began pulling its troops back from positions in the Gaza Strip and easing travel restrictions on Palestinian residents. The move followed a meeting of Israeli and Palestinian security chiefs on Thursday.
Israeli soldiers removed roadblocks near the Kisuffim junction. They had been used to divide the Gaza Strip into three parts.
The barriers were erected earlier this week as part of a military offensive following the killing of six Israeli soldiers in an ambush in the West Bank.
Israeli troops also pulled back from positions in a refugee camp in the center of the Gaza Strip but remained inside Palestinian areas in the northern part of the territory.
The moves followed a meeting between the head of Israel's secret police, Avi Dichter, and Israeli army general Giora Eiland, and three Palestinian security chiefs - Mohammad Dahlan, Jibril Rajoub and Amin al-Hindi.
But the situation remained volatile with Israeli troops arresting one Palestinian in the West Bank suspected of planning to carry out a suicide bombing.
In a separate incident, an Israeli shopper shot dead another Palestinian before he could set off a bomb in a supermarket in the Jewish settlement of Efrat in the West Bank, not from Jerusalem.
The attempted attack came one day Israeli Prime Minister Ariel Sharon announced he would set up buffer zones to prevent Palestinians in the West Bank carrying out attacks inside Israeli territory.
Mr. Sharon unveiled the plan during a televised address to the nation Thursday night. He called on Israelis to remain strong, saying there were no easy solutions to the present conflict with the Palestinians.
His speech was widely criticized by both the left and right in Israel and also by the Palestinian leadership, which attacked him for failing to propose ways to end the fighting that has raged on for nearly 17 months.