Saturday, November 25, 2006 2:28 PM

Israel, Palestinians OK Gaza Cease-Fire

By AMY TEIBEL and IBRAHIM BARZAK, Associated Press Writers

JERUSALEM - A truce meant to end five months of deadly Israeli-Palestinian clashes went into effect throughout the Gaza Strip early Sunday, significantly bolstering hopes of coaxing moribund peace talks back to life.

The Israeli military said all troops were withdrawn from Gaza in the hours before the 6 a.m. cease-fire, announced late Saturday, took force. Dozens of tanks and armored vehicles were parked just over the border in a military staging ground in southern Israel early Sunday, and the streets of northern Gaza were empty.

The agreement was a coup for Palestinian President Mahmoud Abbas as he tries to form a more moderate government than the one currently led by Islamic Hamas radicals. Abbas, a moderate from the Fatah Party elected separately last year, hopes a new government lineup will persuade the West to end crushing economic sanctions imposed after Hamas took power in March.

The truce was meant to halt rocket fire and other militant attacks on Israel from Gaza, and a military offensive Israel launched in the coastal strip in June, less than a year after ending its 38-year occupation. About half an hour before it took effect, Hamas militants said they fired two rockets at southern Israel. One hit a house, but caused no injuries, the military said.

The two sides announced the accord after Abbas telephoned Israeli Prime Minister Ehud Olmert late Saturday to tell him he had arrived at an agreement with Palestinian factions to stop rocket fire and all other violence from Gaza. Olmert reciprocated by pledging to stop all Israeli military operations in Gaza and withdraw all troops there, aides to both leaders said.

Abbas spokesman Nabil Abu Rdeneh said a truce reached in Egypt in February 2005 would be revived.

"There is a signed agreement between the president and Prime Minister (Ismail) Haniyeh and all the Palestinian factions to resort to the agreement of the factions in Cairo in 2005, including ceasing all the military activity from Gaza, starting from Sunday morning," Abu Rdeneh said from Gaza City. "The Israeli prime minister has agreed, and it is going to start tomorrow morning."

Abbas told Olmert that the factions had agreed to stop all violence from Gaza, including rocket fire and suicide bombings, starting at 6 a.m. Sunday, Israeli government spokeswoman Miri Eisin said.

He "asked that, in response, Israel stop all military operations in the Gaza Strip and withdraw all her forces," and Olmert responded favorably, Eisin said.

Earlier in the day, militant factions denied reaching a cease-fire agreement. But after it was officially announced, they acknowledged the accord and said the denials were a product of power struggles among them.

Israeli forces originally entered Gaza in an effort to win the release of a soldier captured in a June 25 cross-border raid by Hamas-linked militants and still in captivity. But they soon widened their objectives to target militants who had intensified their rocket attacks on southern Israel after the September 2005 Gaza pullout.

The violence claimed the lives of more than 300 Palestinians and five Israelis. Most of the dead Palestinians were militants, but dozens of civilians died, too, including 19 members of an extended family killed earlier this month in an attack on their apartment compound.

Despite international criticism over Palestinian civilian deaths, Olmert pledged earlier this month to continue the offensive until Palestinian rocket attacks from Gaza significantly decreased. Instead, as the fighting swelled, rocket fire in November more than doubled from October, killing two civilians in a single week.

On Saturday, a rocket hit an unoccupied house in southern Israel, and blasts ripped apart two cars carrying militants in northern Gaza, killing at least one and wounding several passersby. One vehicle was struck by missiles fired from an Israeli aircraft, and the source of the other blast wasn't known.

Three other militants were killed in clashes with Israeli troops elsewhere, including two hit by Israeli fire near the main Gaza-Israel cargo crossing, Palestinian officials and Hamas said. The army said it had no information about fighting in the vicinity of the Karni passage.

The militants' capture of Cpl. Gilad Shalit and the subsequent Israeli offensive cut short efforts by Olmert and Abbas to restart peace talks that broke down six years ago. A truce could help to create the momentum to get talks moving.

"We welcome the announcement and see this as a positive step forward," White House spokesman Alex Conant said Saturday evening in Washington. "We hope it leads to less violence for the Israeli and Palestinian people."

Although Israel has no ties with the Hamas government, which rejects the Jewish state's right to exist, it considers the separately elected Abbas an acceptable negotiating partner. He and Olmert agreed months ago to meet, but Abbas has been reluctant to set a date for talks without receiving assurances the meeting would yield real dividends for the Palestinians, like a release of Palestinian prisoners Israel holds.

Olmert has said no prisoners would be released to Hamas before Shalit is freed.

A cease-fire in Gaza is part of a broad package Abbas is trying to put together in the hope of persuading the West and Israel to resume the flow of hundreds of millions of dollars in funding cut off to pressure Hamas to recognize the Jewish state and renounce violence.

The centerpiece of that package would be the formation of a new government less inimical to Israel. Another major element is a prisoner swap.

Hamas' supreme leader, Khaled Mashaal, arrived in Cairo this week to discuss both issues with Egytian mediators, but there was no word of a breakthrough.

On Saturday, Mashaal said his group was willing to give peace negotiations with Israel six months to reach an agreement for a Palestinian state in Gaza and the West Bank, but threatened a new armed uprising if the talks failed.

The double-edged comments were his strongest confirmation that the Islamic militant group would allow Abbas to try to negotiate with Israel. But it was also the first time he has set a deadline with an explicit threat of a new uprising.

Israel had no immediate comment on Mashaal's proposal.

AP correspondent Ibrahim Barzak reported from Gaza City, Gaza Strip.