Israeli troops and tanks have pulled out of two Palestinian areas in the West Bank city of Hebron to make way for Palestinian police.
The move was made under apparent US pressure as part of Washington's bid for support in the region for its war on terrorism. It went ahead despite the killing of Hamas militant Mr Abdel Rahman Hamad on Sunday by Israeli forces.
Palestinian security sources said Israeli soldiers moved out of Hebron's Abu Sneinah and Wadi al-Harria neighborhoods in the pre-dawn hours as part of an agreed withdrawal.
The latest move reverses re-occupation on October 5th when Israeli troops and tanks entered the neighborhoods after Palestinian gunmen fired into a crowd of Jewish worshippers in the heart of Hebron two days earlier.
"The agreement is very specific, that [Palestinian] forces will replace our forces. They'll take upon themselves responsibility for complete quiet. If not, then [the withdrawal] will not happen," Israeli Foreign Minister Mr Shimon Peres said.
"But the proposal came from their side, and I thought it was a good proposal," he said.
Prime Minister Mr Ariel Sharon's cabinet said in a statement it had decided to ease travel between some Palestinian cities in the West Bank, allow the entry of petrol and widen the permitted fishing zone in the Gaza Strip - provided Palestinians fulfilled conditions.