MIDDLE EAST: As the Israeli army pulled out of Bethlehem yesterday, the echoes of the first phases of the failed Oslo accords were unmistakable.
A decade ago, assuring each other of their desire for peaceful co-existence, Israeli and Palestinian leaders agreed on an initial, confidence-building Israeli military withdrawal from parts of the Gaza Strip and the West Bank city of Jericho.
Now, as the two sides try to make more of a success of the US-backed "road map" framework, the Israeli army, which had pulled out of parts of the Gaza Strip last week, was vacating a different West Bank city.
Dozens of armed, blue-uniformed Palestinian policemen marched into the centre of Bethlehem to applause and cheers from locals, soon after the last of the Israeli vehicles had headed off in the opposite direction. (They came on foot, one officer said, because only four of their 56 vehicles had survived the conflict.)
But while the Israeli withdrawal may not be hugely significant at this stage - the army had retaken and relinquished control of Bethlehem several times in the past three years, and even now will remain encamped around the city - there is mounting optimism on both sides that it presages further progress.
President Bush yesterday hailed the Israeli and Palestinian leaders who were newly "willing to take a risk for peace."
And, in the clearest sign of the fragile new confidence, the US administration, which had refrained from channelling financial aid to the Palestinian Authority since characterising the regime of PA President Yasser Arafat as being "compromised" by terrorism, has despatched a $30 million aid package for repairing West Bank and Gaza infrastructure destroyed in Israeli military actions, and indicated that considerably larger sums might soon be forthcoming.
Additional US aid and, for that matter, additional Israeli withdrawals from other West Bank cities, however, will depend on the maintenance of the intifada truce declared by most Palestinian factions last Sunday, and what the Americans and Israelis insist must be a campaign by the PA's Prime Minister, Mr Mahmoud Abbas, to dismantle Hamas, Islamic Jihad and other extremist groups.
The US Secretary of State, Mr Colin Powell, reiterated on Tuesday that "these terrorist organisations have to be dismantled." Mr Sharon has intimated that further military pullbacks - from cities Israel handed over to PA control under the Oslo process in 1995, but recaptured last year at the height of intifada conflict - will be conditional on Mr Abbas's determination to confront groups like Hamas.
In talks with Mr Abbas on Tuesday, he flatly rejected demands for a speedy pullback from cities such as Ramallah and Hebron.
He also rejected Mr Abbas's call for Mr Arafat to be allowed to travel freely in the West Bank and Gaza; the PA president is under Israeli siege in Ramallah. Mr Sharon said that Mr Arafat could travel "one way" to Gaza, but nowhere else.
By contrast, Mr Sharon is partially meeting Mr Abbas's demand for the release of Palestinian security prisoners. There are some 6,000 in Israeli jails, and the Shin Bet security service is compiling lists of candidates for release, with a first 20 set to be freed overnight.