The Palestinian Authority has abandoned plans to remove wanted militants from Palestinian President Yasser Arafat's headquarters.

Palestinian militants confined to Mr. Arafat's headquarters in the West Bank city of Ramallah are to be allowed to remain in the compound.

The 17 militants have been held at gunpoint in a room of the compound since early Saturday, after they refused a request to be transferred to a prison in Jericho, also in the West Bank.

Following their arrest by the Palestinian security forces, other militants threatened to break-off a declared truce with Israel and resume violent attacks.

The 17 militants moved into the compound in order to avoid capture by the Israeli authorities. Some of them have lived in the compound for months, and Israel believes they were using the base to plan future attacks.

The militants told reporters that following negotiations with the Palestinian Authority they will be allowed out of custody and given the right to remain in the compound. Under a negotiated agreement to remain in the compound, the militants can only have contact with their families and must refrain from violence.

Palestinian officials say Mr. Arafat wanted to remove the militants, in an attempt to convince Israel to allow him the right to travel freely again. He has been confined to Ramallah for more than a year and a half. He has not left the area for fear that Israel that would ban him from returning to the West Bank.

Israel cut off all direct contacts with Mr. Arafat in December 2001 and has destroyed most of his headquarters in a series of military raids.

Israeli Prime Minister Ariel Sharon said last week that the prospects for peace will remain slim if Mr. Arafat continues to wield power within the Palestinian Authority.