A senior Israeli official hints at a favorable response, if Palestinian militants agree to a cease-fire. The suggestion comes as Palestinian groups meet in Egypt to discuss a possible suspension of attacks against Israel.

Israel's deputy defense minister, Zeev Boim, told Israel Radio it's possible that Israel would scale back its military operations in the West Bank and Gaza Strip, if Palestinian militants agree to a cease-fire.

Palestinian Prime Minister Ahmed Qureia wants to secure a promise from militant groups to halt their attacks in the hope that Israel will respond by halting military incursions, its arrest of suspected militants and its targeted assassinations of militant leaders. That could pave the way for a resumption of talks under the internationally backed road map peace plan.

Israeli military officials said that, prior to gathering in Cairo, Palestinian militant groups were in the process of stepping up attacks against Israel, ahead of a possible cease-fire. The military said that is why it had increased its own security sweeps in the West Bank in the past several days.

On Wednesday, Israeli security forces arrested two Palestinians believed to have been preparing for a suicide attack against a school in the town of Yokneam. The two men were arrested in the village of Bardale, in the northern Jordan Valley, and police say they found a 10-kilogram explosive belt.

Security forces were on high alert Wednesday, after they had received tips of planned attacks in the north.

At the same time, the military said it is continuing to ease restrictions on the movement of Palestinians in the West Bank by removing a number of roadblocks and checkpoints, including some around Ramallah, Bethlehem and Qalqilya.

In another development, Israel's housing minister confirmed reports that the Israeli government has invited bids for the construction of 13 private new homes in the settlement of Ariel, located in the West Bank.

Palestinian and U.S. officials have strongly criticized Israel's continued settlement activity, which runs counter to the road map peace plan.