This was announced following talks between Israeli and Palestinian negotiating teams Wednesday night at an undisclosed location in Israel, the report said.

The meeting focused on discussing the "Gaza first plan", under which the PNA would assume security responsibility in those areas from which the Israeli troops withdraw.

The report said that the Israeli team was led by Foreign Minister Shimon Peres, and the Palestinian side was headed by PNA minister Saeb Erekat.

Peres was quoted by the Ha'aretz Daily as saying that Israel wasoffering to initially withdraw from the Gaza Strip not for territorial reasons, but due to the fact that the Palestinian security forces in Gaza have remained intact.

Peres also reportedly said that Israel is willing to conduct practical negotiations on transferring security control in all places where Palestinians are willing to ensure that calm will prevail.

Prior to the meeting, Israel pledged to transfer two payments offrozen tax funds to the Palestinians. The two payments each total 70 million Israeli shekels and comprise 10 percent of the total amount Israel has withheld since shortly after the outbreak of the conflict in September 2000.

(Xinhua News Agency August 15, 2002)