Israel has ordered the removal of three more Jewish outposts in the West Bank and at the same time is allowing thousands of Palestinians in Gaza to return to work inside Israel.
Israeli Prime Minister Ariel Sharon and his defense minister signed an executive order for the removal of an additional three illegal West Bank outposts.
The government has listed 28 settlements for dismantling, including 18 inhabited by 400 people who will be relocated to other more established settlements.
Jewish settler leaders have protested the decision and say they want to hold talks aimed at reaching a compromise. But the government says it is not willing to negotiate.
The order follows sustained pressure from the U.S. administration, which wants all settlement activity to stop in order to help pave the way for a resumption of Israeli-Palestinian peace talks.
In a separate development, Israel lifted a ban on Palestinian workers from Gaza entering the Jewish State. The ban followed a suicide bombing at a crossing point last week that killed four people.
The Israeli Army has authorized up to 15,000 Palestinians from Gaza to enter Israel for employment.
Israel has been strongly criticized by the international community for not allowing more Palestinians to work inside the Jewish State.
Israel also imposes tight travel restrictions within the Gaza Strip and the West Bank, which Palestinians say have helped to ruin their economy. The restrictions were applied following the start of a Palestinian uprising against Israel in September 2000, which has so far taken the lives of more than 3,000 people on both sides.