Both sides have already agreed that Palestinian police will start arriving in Gaza and Jericho, perhaps as early as tomorrow, and that 49 Palestinian exiles can return to the occupied territories to start preparing for the transfer to self- rule. Palestinian sources said that Israel had agreed to accept up to 10,000 Palestinian police for Gaza and Jericho.
The Israeli army has already closed a big base in Gaza City and has started to withdraw some equipment. Preparations are also under way for deployment of 160 monitors from Norway, Italy and Denmark to the West Bank town of Hebron. Two Norwegian officials were due to arrive in Cairo yesterday for planning meetings.
It is clearly in the interests of both sides now to solve differences as soon as possible in order to win back confidence in the Gaza-Jericho accords before extremists attempt further sabotage. However, return to the negotiations on current terms constitutes a big climbdown by Yasser Arafat, the chairman of the Palestine Liberation Organisation, whose officials insisted after the Hebron massacre that the talks could not restart until Israel disarmed settlers, dismantled many settlements, agreed to international protection for Palestinians and placed the whole issue of settlements high on the agenda.
Israel has agreed to the monitoring force for Hebron and has disarmed a small number of settlers. Two extremist Jewish groups, Kach and Kahane Hai, have been banned and yesterday the president of Kach, Baruch Merzel, was arrested after several weeks on the run.
However, Yitzhak Rabin, the Prime Minister, told Israeli opposition leaders on Friday that he had no intention of dismantling any settlements - even the most exposed and provocative enclaves in the very centre of Hebron. The issue of settlements remains off the current agenda of the peace negotiations. The Prime Minister has also promised settler leaders that military protection for settlers will be stepped up.
Mr Arafat knows he is risking his credibility by talking again on these terms, particularly in Hebron, where support for the PLO has plummeted since the massacre. Islamic Jihad, one of two militant Islamic groups, warned Norway at the weekend that its observers could be shot if they take to the streets of Hebron.
Mr Arafat, however, has staked his political future on the Gaza-Jericho deal and had no choice but to go forward. It is possible that his gamble will pay off. The sight of Palestinian police and returning exiles, plus real evidence that the Israeli military are pulling out, could rekindle some of the euphoria seen in September.
Reports in the Hebrew press claim the Israeli army has received new orders to keep a lower profile. However, the security situation remains highly volatile. Only last week six members of Mr Arafat's PLO faction, Fatah, supporters of the peace process, were shot by Israeli undercover soldiers in the Gaza Strip.