Palestinian Information Minister Nabil Amr said on Sunday the agreement came during talks between Palestinian Prime Minister Mahmoud Abbas and his Israeli counterpart Ariel Sharon.
“The most positive thing that we agreed about was that the number of prisoners which must be released will be discussed in a joint committee,” said Amr.
Israel has so far refused to agree to the release of 350 Palestinian prisoners. Israel holds at least 6,000 Palestinians in its jails.
There had been expectations that Sharon would seek to bolster Abbas’ standing by allowing the release of a small number of activists.
Earlier, an unnamed Palestinian source described the talks as “difficult”, saying at times Abbas and Sharon “screamed at each other”.
The two sides also discussed Palestinian calls for Israel's withdrawal from the occupied West Bank.
Siege on Arafat
Arafat has been under siege since
The plight of Palestinian President Yasir Arafat, who has been effectively confined to his headquarters in the West Bank city of Ram Allah by Israeli forces since December 2000, also dominated talks, said a Palestinian source.
Abbas told Sharon that any talks about moving forward on the ground without lifting the siege on Arafat would be useless, said a source.
Sharon had told Abbas that Israel would “study seriously” an end to the siege on the Palestinian leader.
For his part, Arafat published a decree on Sunday forbidding “incitement to violence” and “incitement to violate agreements contracted by the Palestine Liberation Organisation (PLO)”.
“Any person committing any of the above acts will be prosecuted according to the law,” said the text of the decree published by the official WAFA news agency.
The decree bans “incitement to racial discrimination, encouraging unlawful acts of violence or resorting to violence in relations with brotherly countries and foreign countries”.
The Palestinian parliament, known as the Legislative Council, is to draw up a law to enshrine the new decree which comes into effect immediately.
The announcement came six weeks after the formal launch of the US-backed “road map” aimed at ending the Palestinian-Israeli conflict”.
Despite the talks, violence continued. The Israeli army shot dead a Palestinian activist in the West Bank town of Jenin during an exchange of fire.
The Israeli army reported an explosion east of Jenin earlier as one of its patrols passed by followed by automatic rifle fire but did not report any casualties.
Five Palestinian resistance groups, including Hamas and Islamic Jihad, declared a three-month ceasefire at the end of last month.