Israeli Prime Minister Mr Ariel Sharon has ordered the army to ease restrictions on Palestinians amid signs of resistance to the five-week occupation of major West Bank towns.
Israel is also scheduled to turn over about €15 million to the Palestinians, the first of three installments of tax revenues it has withheld for much of the past 22 months of fighting.
Mr Sharon has ordered the army to shorten curfews, lift some roadblocks, and allow 12,000 Palestinians to enter Israel for work, a statement said.
The government had said it would issue 7,000 work permits, although it said the number could reach 70,000. Before the conflict, some 125,000 Palestinians crossed into Israel daily for work.
The announcement came after thousands of Palestinians in the West Bank town of Nablus defied the army's five-week curfew yesterday, filling markets and opening offices as Israeli soldiers stood by.
In the West Bank yesterday, Israeli soldiers arrested two local leaders of the militant group Hamas in Ramallah. One of them, Mr Hussein Abu Kweik, had been the intended target of a missile strike that killed his wife and three children in March, Palestinian intelligence officials said.
Israeli security sources claimed the two had been involved in recent suicide bombings.
Also in the West Bank, Israeli soldiers shot and killed an 18-year-old Palestinian as he watched an army incursion into Madra a-sharqieh, east of Ramallah, Palestinian intelligence officials said. Israeli security sources said soldiers fired at two men who were throwing concrete blocks at them.
AP