Israel's Prime Minister Ariel Sharon and Palestinian President Mahmud Abbas are to meet in the Red Sea resort of Sharm al-Shaikh for the highest-level meeting between the two sides since 2003.

Palestinian and Israeli officials said the deal on a truce had been reached in pre-summit talks.

"We have agreed to declare a mutual ceasefire," said Muhammad Dahlan, a close Abbas aide who has been in the talks. "This ceasefire means a halt to all actions against Palestinians and Israelis in accordance with the road map."

But it was unclear whether the ceasefire would be respected by all Palestinian groups, who have followed a de facto truce for more than two weeks after Abbas urged them to help him revive peacemaking.

Defiance

In a sign of lingering defiance, the Democratic Front for the Liberation of Palestine and groups linked to Abbas' Fatah faction said they had fired three mortar bombs at a Jewish settlement in Gaza.

Israeli sources said there was no damage.

"We have agreed to declare a mutual ceasefire. This ceasefire means a halt to all actions against Palestinians and Israelis in accordance with the road map"

Muhammad Dahlan,
Abbas' aide

Hamas leader Mahmud al-Zahar said the armed group hoped Abbas would not make any declaration without getting approval from the various factions.

Ending a visit to the Middle East, US Secretary of State Condoleezza Rice said both Sharon and Abbas had accepted invitations to the White House in a few months for talks with President George Bush.

"There should be no doubt about the commitment of the United States to this process at this time - no doubt about the commitment of the president, no doubt about my personal commitment," Rice said at Abbas' West Bank headquarters.

Aid money

Bush has pledged $350 million in aid to the Palestinians. Rice announced $40 million would be given to them within 90 days in a "quick action programme" to help in job creation and rebuilding infrastructure.

Palestinians have welcomed any withdrawal from occupied territory but criticised Sharon's vow to hold on to large West Bank settlement blocks in any future peace deal.

Speaking to Aljazeera from Jerusalem, Israeli political analyst Maier Cohen said Sharon's pullout plan would not be enough.

"Withdrawal from the cities of the West Bank is neither the first nor the last step as Israel should abide by the internationally-backed road map plan for peace like ending settlements, removing settlement outposts, supporting the chairman of the Palestinian Authority or the Palestinian President Abu Mazin as much as possible and not to take unilateral measures in Jerusalem."