Children to be released from Church of the Nativity

Palestinian negotiators wait to enter the Bethlehem Peace Center for Wednesday's talks.

BETHLEHEM, West Bank (CNN) -- Palestinian children under the age of 18 will be allowed to leave the Church of the Nativity early Thursday after weeks of being caught in a standoff between wanted Palestinians inside and Israeli troops outside, authorities said.

The development raised hopes of a breakthrough in the 3-week-old standoff that has garnered international attention and prompted a public prayer "for a solution to this inhumane situation" from Pope John Paul II.

The agreement to secure the release of the children came during a four-hour meeting Wednesday between Palestinians and Israelis, a Palestinian source close to the talks told CNN. In addition, the bodies of two Palestinians, which have been in makeshift coffins for more than a week inside the church, will be removed.

The release is expected to take place in the early hours of Thursday.

"The terrorists have committed themselves to releasing 10 to15 children under the age of 18. This includes two 10-year-olds," said Capt. Joel Leyden, an IDF spokesman. He said the bodies of "two terrorists" would be removed.

Negotiations over how to end the standoff are to resume Thursday around 1 p.m. (6 a.m. EDT). Israel has said about 30 wanted Palestinians are inside the church. About 170 other Palestinians, mostly civilians, are also there. Israel contends the people inside are being held hostage, while Palestinians say the civilians fled to the church to escape the fighting outside.

A Palestinian man shakes an Israeli soldier's hand after exiting the Church of the Nativity and surrendering.

The Palestinian source said Israel has presented a plan for most of the wanted Palestinians to go to Gaza where they would be dealt with by Palestinian leadership, and that the other wanted Palestinians would either be deported or face trial in Israel. Israel is to present a list Thursday of those it wants tried in Israel or deported, the source said.

He added that Palestinians were worried about the precedent such a deal might set, and that they were trying to get in contact with Palestinian Authority President Yasser Arafat to find out what he thinks about the proposal.

Israeli military officials said their troops coordinated the release Wednesday of two unarmed Palestinians from the church who were in a state of exhaustion, but not ill.

Wednesday's meeting between the two sides took place at the Bethlehem Peace Center on Manger Square, about 100 feet from the Church of the Nativity. Shooting broke out around the square throughout the day, including minutes before the Palestinian delegation arrived for the meeting.

Overnight, Israeli forces shot and wounded an armed Palestinian as he was getting ready to fire on the soldiers, the IDF said. He was removed from the compound and taken to an Israeli hospital. The IDF said he is on Israel's wanted list and will be transferred to Israeli custody for questioning after he is released.

About 1,400 miles away, in the Vatican, the pope openly prayed for a solution.

"My thoughts are always on the Church of the Nativity in Bethlehem, where the religious community and many other people remain under siege after more than 22 days," Pope John Paul II said during his weekly audience at the Vatican. "Conditions -- which are already bad because of the lack of water and food -- have become worse after the breakup of the telephone lines.

"We continue to pray to the Lord for a solution to this inhumane situation and for peace in the region, which is so dear to all the believers," the pontiff said.