Israeli and Palestinian negotiating teams resumed talks Monday on a deal to pull most Israeli troops out of the West Bank town of Hebron and a further three-stage redeployment.
Following the establishment of a key agreement between the two parties, hopes are running high for a summit between the two leaders.
The agreement -- secured by King Hussein of Jordan -- allows Israel to prolong its three- stage withdrawal from the West Bank until mid-1998.
Israeli and Palestinian negotiators met Monday morning at a Jerusalem hotel to try and draft the agreement under which Israel would withdraw troops from West Bank areas ending in mid-1998.
The emerging accord also sets the stage for a long-overdue Israeli troop pull back in Hebron.
It came after an intervention by Jordan's King Hussein and continued pressure from U-S envoy Dennis Ross.
In a key compromise, Palestinian leader Yasser Arafat told Hussein he would agree to a U-S proposal to allow Israel to prolong its West Bank pullout which originally was to be completed by September.
Arafat agreed to the compromise after being assured by Ross that the United States would guarantee the Israeli withdrawal in a separate document, to be attached to the agreement.
Palestinian negotiator Saeb Erekat, arriving for Monday's talks, was cautious when asked whether the elusive agreement on Hebron and the West Bank troop pullback could finally be completed Monday.
"We have protocol for Hebron, we have the whole further redeployment accord, we have many other things that we need to work. Let's see, we have all day today and the time we finish all these issues, we will refer to President Arafat and I'm sure President Arafat and Prime Minister Netanyahu will decide whether to take us further."
Q: "That will be today, do you think?"
"I don't know - depends on our ability to continue."
SUPER CAPTION: Saeb Erekat, Chief Palestinian Negotiator
The remaining sticking points to an agreement include a timetable for the release of Palestinian security prisoners and security arrangements for a Palestinian airport.
Netanyahu was sharply criticised Monday by hard-liners in his cabinet, and at least seven ministers in his 18-member cabinet were expected to vote against the accord.
Cabinet approval is not legally required, but it would be difficult for Netanyahu to proceed without the support of a majority of his ministers.
Israeli settlers have attacked the softening of Netanyahu's approach to the Palestinians - he came to power on a platform of no dialogue with his Palestinian neighbours.
"It's a shame to Mister Netanyahu that he is ready to give up the land of Israel, his vision, other vision, his writings, everything. But it will not help him - he has no majority to give 95 percent of Judea and Samaria (Hebrew: the West Bank) in the government and I'm sure there's nothing in the signatures that are going to celebrate here in this hotel in Jerusalem."
SUPER CAPTION: Benny Alon, Settler
The emerging deal would constitute the first progress since Netanyahu came to power in May's elections.
It would also help calm Arab-Israeli tension which were greatly heightened by doubts Netanyahu was committed to the peace process.
Israel's government spokesman says he hopes agreement could be reached.
"The agreement regarding the Israeli redeployment in Hebron has been settled. The outstanding issue regarding the further redeployment issues can be settled today if Chairman Arafat agrees to the compromise on the table. Certainly, from our point of view, we believe that it's important to go forward in the peace process and we're hoping the Palestinians will see eye-to-eye with our point of view."
SUPER CAPTION: Moshe Fogel, Israeli Government Spokesman
The U-S brokered talks have be underway since October, when Washington intervened following clashes between Israelis and Palestinians in which 79 people were killed.
The Hebron pullout is far more sensitive than Israeli withdrawals from other West Bank cities because of the presence of 500 Jewish settlers amid its 130-thousand Palestinians.