Israel said Saturday it was willing to take new measures to improve life for Palestinians -- provided the attacks against Israelis end -- in a resumption of high-level talks that had been called off after bombings last week, Israeli officials and news reports said.
Israeli Foreign Minister Shimon Peres met with a Palestinian delegation headed by Palestinian Cabinet Minister Saeb Erekat for more than three hours, said Yaffa Ben-Ari, a Foreign Ministry spokesman.
The Palestinians urged the Israelis to end their occupation of Palestinian cities and towns in the West Bank, saying they couldn't prevent terror attacks if the Israelis were in control, Israel Radio said. In addition, Palestinians demanded that Israel release tax money it has withheld, the report said.
The Palestinian economy has been shattered by nearly 22 months of fighting -- and more recently by Israel's monthlong occupation of West Bank cities.
Before fighting erupted in September 2000, an estimated 125,000 Palestinians crossed daily into Israel for work. Israel has since blocked most Palestinians from entering. Closures in the West Bank and curfews in individual towns have further prevented Palestinians from working.
Two weeks ago, Israeli Cabinet members approved some measures to ease the situation, including increasing the number of permits for Palestinians to work in Israel from 2,000 to 7,000, a security official said.
After two attacks last week killed 12 Israeli residents, Defense Minister Binyamin Ben-Eliezer froze implementation of the decisions.
On Saturday, Peres told the Palestinians the 7,000 work permits would be issued in the coming days -- provided there were no attacks, Israel Army Radio said.
In addition, Israel said it was willing to extend the permitted fishing zone off the Gaza coast and to keep open Gaza's Karni crossing point for longer periods to allow more merchandise to pass through, Army Radio said.
Peres said Israel was willing to do more -- and wanted to pull out from the West Bank -- if the attacks end, the radio reports said.
Ben-Ari said the talks would continue in the coming days.
Peres and Palestinian Cabinet ministers relaunched high-level meetings in early July, resuming a dialogue that had been stalled for months. But they were canceled after two attacks last week.
An aide to Palestinian leader Yasser Arafat, Nabil Abu Rdeneh, said success from the meetings would be contingent on Israel's withdrawal from the seven West Bank towns and cities it occupied a month ago after a string of attacks.
"I believe if Israel is really serious in the resumption of the political process, they have first to immediately withdraw from the Palestinian territories," he told reporters in Ramallah after Arafat met with Russian envoy Andre Vdovin.
Israeli officials have said their presence in the West Bank is open-ended and necessary to prevent attackers from reaching Israel. In recent days, however, the army has eased up on the curfews in some towns, giving Palestinians more time to stock up on food and visit doctors, friends and family members.
Saturday's meeting came amid broad international criticism of an Israeli government proposal to deport relatives of suicide bombers to the Gaza Strip to dissuade future attackers.
The issue arose after Israeli forces on Friday demolished the homes of two suspects in last week's attacks and arrested 21 of their relatives. Israeli officials said the government was considering deporting those who had a direct link to attackers.
On Saturday, Arab League Secretary-General Amr Moussa joined Amnesty International, the U.N. secretary-general, Israeli and Palestinian human rights groups in saying the forced deportation violated international law.
The White House also criticized the move and said it would take the matter up with the Israeli government.
Cabinet minister Dan Naveh, of the hawkish Likud party, defended the proposal and denied critics' claims that it amounted to collective punishment, which is barred under the Geneva Conventions.
He said deportation was a way to counter the support families of suicide bombers receive from militant groups such as Hamas as well as from Iraq, which sends up to $25,000 to families of bombers.
"I also believe that on the moral level, the saving of the lives of my children is more important than the quality of life of a Palestinian family which sends its sons to murder our children," Naveh told Israel Radio.
Separately Saturday, a car exploded in an Arab neighborhood of Tel Aviv, killing the driver. Police initially said the blast in Jaffa was a bomb that went off prematurely.
But late Saturday, police spokesman Yossi Avneri said the explosion may have been the work of common criminals -- not Palestinian militants.