Israeli Prime Minister Ariel Sharon has promised to release millions of dollars in frozen tax revenues to the Palestinian Authority, on condition that it is not used for terror. The offer came amid renewed negotiations between Israeli and Palestinian leaders.

Mr. Sharon has pledged to release funds to the Palestinian Authority, if an international body is set up to supervise the transactions. He says such a body must ensure that none of the money reaches the Palestinian leader, Yasser Arafat, or any Palestinian group involved in violence.

Israel froze tax revenues it collects on behalf of the Palestinian Authority, following the start of clashes in September 2000. The total sum withheld until now is estimated to be about $400 million.

Mr. Sharon's conditions for releasing the money were relayed by Israeli Foreign Minister Shimon Peres during talks with Palestinian officials on Saturday. Mr. Peres told the Palestinian officials that 10 percent of the funds would be released immediately, if they agreed to the establishment of a joint U.S.-Israeli-Palestinian committee to oversee the allocation of the revenue.

The talks were held during a time of increasing tensions, following a Palestinian terrorist attack last week against a Jewish settlement, in which eight people were killed, and a double suicide bombing in Tel Aviv that killed another three.

One Israeli was moderately injured Sunday when a bomb exploded under a rush-hour train near Tel Aviv. In a similar incident three weeks ago, an explosion on a railway line in the central town of Lod wounded four train passengers.