Israel has signalled for the first time that it is ready to clear the way to Palestinian parliamentary elections on 25 January by lifting the threat to voting in East Jerusalem.
Shaul Mofaz, Israel's Defence Minister, predicted yesterday that: "There will be elections in East Jerusalem in the ... post offices approved in 1996, and residents will also be able to vote in other polling booths in the West Bank".
The Palestinian President, Mahmoud Abbas, has made it clear that a bar on voting in occupied East Jerusalem would probably result in the postponement of the first elections to the Palestinian Legislative Council for almost a decade.
Israel's acting Prime Minister, Ehud Olmert, made it clear last night that a final decision would not be taken until a meeting of the cabinet on Sunday. He said Hamas would not be allowed to appear on ballot papers in East Jerusalem if voting was to be permitted in the city.
Officials were subsequently at pains to insist that the details of a likely compromise had still to be worked out. But Israel appears to have bowed to US pressure - and possibly to the desires of Mr Abbas - by being ready to compromise on its earlier threat to prohibit voting in East Jerusalem because Hamas was participating in the elections for the first time.
The fact that the district-level candidates Hamas is supporting are not actually declared members of the group itself was thought to be one route to a compromise in which face can be saved on all sides.
The moves came as the critically ill Israeli Prime Minister Ariel Sharon showed signs of movement in his left side for the first time since suffering a brain haemorrhage last week. As doctors continued to reduce the dosage of drugs that had been used to maintain a coma, the Hadassah hospital yesterday said Mr Sharon's life was not in "immediate danger". In another positive sign, there was more pronounced movement on his right side. But it may still be days before the neurosurgeons who have operated on him three times can make a full assessment of the brain damage he may have suffered.
Mr Sharon's eyes have yet to open - this would be regarded by his doctors as an important sign of progress.
Army radio reported that Mr Sharon's physicians were planning to stimulate his senses by putting a plate of shwarma near enough for him to smell it. The dish of spicy cooked meat, popular with both Palestinians and Israelis, is said to be one of the Prime Minister's favourites.
Mr Sharon, 77, suffered a massive stroke last Wednesday and underwent three operations to stop haemorrhaging on the right side of his brain. He has been kept in a medically induced coma since the stroke to give him time to recover.
Israelis were stunned by Mr Sharon's stroke and have intensely followed the news of his condition. Many people gathered in synagogues over the Sabbath to offer prayers for the leader's recovery.
Mr Sharon's son Omri came out of the hospital yesterday to offer his thanks to Israelis, the hospital and the Prime Minister's doctors.
"I came to thank, in the name of my family, the citizens of Israel, who since Wednesday have supported us with their concern, with warm and loving prayers for the well-being of my father," he said.