Israel set to ease Palestinian curbs

Peres: We do not want them to suffer

JERUSALEM (CNN) -- Israeli Foreign Minister Shimon Peres says his country is ready to ease restrictions on Palestinians in the West Bank and Gaza.

Peres was in Cairo to discuss with Egyptian officials ways to end seven months of violence with Palestinians in which more than 400 people -- the vast majority Palestinians -- have lost their lives.

Egyptian President Hosni Mubarak also confirmed that Israelis and Palestinians were holding talks aimed at reaching a ceasefire.

Peres told reporters: "There are still issues that we have to clarify and I don't want to claim that everything is OK and everything is agreed. But I can say that an agreement on how to handle the situation was really achieved.

"We must pay attention to the situation and the mood of the Palestinian people in the territories. We do not want them to suffer, we do not want them to pay a price for terror and violence," Peres said.

AUDIO CNN's Rula Amin: Progress has been made towards a ceasefire agreement 632 Kb/58 secs. AIFF or WAV sound CNN's Ben Wedeman: The question now is if Arafat is in control to stop the Intifada 534 Kb/49 secs. AIFF or WAV sound

"I have informed the president (Mubarak) and the foreign minister (Moussa) on behalf of the prime minister and the defense minister that from this morning we are going to take steps to facilitate the life of the people in the territories in every possible way."

Israel has imposed tough restrictions on Palestinian areas since the uprising began in September, saying it was a security requirement.

Palestinians say the ruling that bars about 130,000 of their workers -- about one-sixth of the work force -- from their jobs in Israel is collective punishment and destroys their economy.

Mubarak also told reporters that Israeli Prime Minister Ariel Sharon stated in a letter to him that the Israelis would end restrictions and move towards a ceasefire if violence ended.

"Four weeks after the ceasefire, negotiations will start to find a solution to the situation and this will give hope that there will be stability," Sharon stated in the letter, according to Mubarak, the Associated Press reported.

Palestinian officials said they had no knowledge of any ceasefire deal. "We were not informed of such an agreement. This is the first we hear of it," a senior official in Gaza told Reuters news agency.

Peres was in Cairo to discuss an Egyptian-Jordanian peace proposal that calls for an end to violence, confidence-building measures and a return to peace talks.

Journalist Dale Gavlak told CNN that another key sticking point in the talks, which were described as serious and detailed, was the issue of Jewish settlements.

Gavlak said Peres told reporters that existing settlements should be allowed to develop naturally, but Egyptian officials argued they be frozen.

Peres is travelling on to Jordan and was then due to return to brief Sharon before flying to Washington late Sunday for talks with U.S. Secretary of State Colin Powell and other senior officials.

Israeli paramedics carry a woman wounded in a mortar attack in Gaza on Saturday

The talks were taking place against a backdrop of violence. Police in northern Israel were investigating a drive-by shooting Sunday by suspected Palestinian gunmen that left an Israeli man dead.

Meanwhile, the Israeli Army said two mortar shells landed in a Jewish settlement in Gaza but no one was hurt.

On Saturday, a Palestinian and an Israeli were killed in separate shooting incidents and five Jewish settlers were hurt in a Palestinian mortar attack in Gaza.

Israel blamed Palestinians on Saturday for the mortar attacks in Gaza, including one on a youth club that it said left five Israeli settlers wounded.

Palestinian Authority President Yasser Arafat Saturday ordered his security chiefs to prevent further mortar attacks from Palestinian-controlled areas against Israelis, senior Palestinian police sources told CNN.

Sharon condemned the attacks, which he said were proof that the Palestinian Authority was doing nothing to prevent -- and is actively involved in -- attacks on innocent Israeli women and children in their own communities."

Reuters reported that in the West Bank city of Jenin, the "Al-Aqsa Martyrs Brigade" issued a statement claiming responsibility for a shooting on a main highway in northern Israel late Saturday that killed an Israeli man and wounded a woman.

However, officials in Arafat's Fatah faction later denied the group was behind the statement, adding that the attack may have been carried out by Fatah members involved in independent armed groups.

The Israeli man was returning home with his family from an outing in northern Israel when suspected Palestinian gunmen stopped his car to ask for directions. When the passengers answered in Hebrew, the gunmen opened fire, Israeli police said.

Senior Palestinian police sources also told CNN that Abdel-Aziz al-Rantissi, a senior official of the militant Islamic group Hamas, was detained for investigation of his activities by Palestinian security forces.

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