Israeli Prime Minister Ariel Sharon and his Palestinian counterpart, Ahmed Qureia, are exploring new ways to reach a cease-fire and re-start peace talks. The moves come as the Palestinian legislature approved Mr. Qureia's new cabinet.
Israel is offering to give Mr. Qureia a grace period to allow him a chance to stop Palestinian armed groups from launching violent attacks.
During this period, Israel would agree to scale back its military operations on condition that Palestinian terrorism is brought to a halt.
The offer came as Palestinian parliament on Wednesday endorsed Mr. Qureia's new government, ending months of political instability and further raising hopes for peace.
The latest efforts toward reaching a truce are also meant to set the stage for face-to-face talks between Mr. Qureia and the Israeli leader Ariel Sharon.
Dore Gold, an advisor to Mr. Sharon, says that Mr. Qureia's government is facing a moment of truth.
"The new Palestinian government is really at a crossroads," said Mr. Gold. "It can decide to continue to nurture terrorism as it has in the past or at long last it can finally fight terrorism and dismantle the vast infrastructure of terrorism. The choice belongs to the Palestinians."
Mr. Gold was reacting to the news that the Palestinian Legislative Council, meeting in Ramallah, had voted 46-13 in favor of Mr. Qureia's Cabinet.
Five lawmakers abstained.
One of the members of the new cabinet is Minister for Peace Negotiations Saeb Erekat, who spoke about the government's program.
"The priority of the government will be to revive the peace process and we hope that all sides will carry out their obligations," Mr. Saeb Erekat said. "The second focus will be on the reform program and then the preparations for the presidential, legislative and local elections and fourthly to maintain the rule of law."
But some Palestinian lawmakers, such as Hanan Ashrawi, expressed doubts that the new Cabinet would fare better than the previous governments.
"So far the formation seems to be more of the same," said Ms. Ashrawi. "The same people who failed are brought back again. It sounds like its musical chairs more than anything else. And I don't see promise of a qualitative change in the people who are forming this Cabinet."
The parliament endorsed Mr. Qureia's Cabinet after both he and Palestinian President Yasser Arafat made impassioned pleas for an end to violence.
Mr. Arafat said that Israel had the right to live in security with a future Palestinian state. And Mr. Qureia called for an immediate and comprehensive cease-fire and a return to peace talks based on President Bush's vision of a two-state solution to the Israeli-Palestinian conflict.