As part of a confidence-building package to be presented at next Tuesday's meeting in Egypt, Israel will carry out a phased military pullback from positions around five Palestinian cities and release "several hundred" prisoners, an unnamed minister said on Thursday.
Prime Minister Ariel Sharon and top cabinet ministers approved the confidence-building measures at a meeting in Tel Aviv that was to be followed by talks later in the day between senior Israeli and Palestinian officials.
Palestinian officials said earlier that differences still remained over the number of prisoners Israel will set free and criteria for their release.
The minister said no Palestinians with "blood on their hands", a reference to attacks that caused Israeli casualties, would be freed under the decision.
The issue is key to new Palestinian President Mahmud Abbas' attempts to consolidate power following the death of Yasir Arafat.
Israel's cabinet has approved a
set of peace-building measures
Israel and the Palestinians said they hoped to declare a formal halt to violence at the summit in the Egyptian Red Sea resort of Sharm al-Shaikh.
Abbas said he expected Israel to formally announce that it would match a ceasefire at the meeting with Sharon.
Abbas and Sharon's meeting will be the first summit between the top leaders of both sides in more than four years.
End to violence
Israeli Deputy Prime Minister Shimon Peres predicted that there would be a joint declaration by Abbas and Sharon for a total end to violence which has claimed some 4700 lives since the eruption of the Palestinian intifada or uprising in September 2000.
"I hope that during the course of this summit there will be a declaration of a total end to violence and combat," Peres told military radio.
The meeting could represent a "new chapter that will allow us to move away from the intifada", Peres added.
Sami Abu Zahri, a spokesperson for Hamas, told Aljazeera: "Our position is clear with regard to the truce. What is required is an Israeli commitment to halt all forms of aggression against our people and to respond to the conditions agreed upon by Palestinian factions, top of them is freeing Palestinian prisoners and detainees.
"I hope that during the course of this summit there will be a declaration of a total end to violence and combat"
Israeli Deputy Prime Minister
"What should be focused on in this summit is to what extent Israeli will be committed to our conditions."
Palestinian Negotiations Minister Saib Uraiqat also underlined that Abbas was committed to the end of the bloodshed by meeting its obligations under the terms of the troubled roadmap peace plan.
"Between us and the Israelis there is the road map. The road map says we must stop the violence against the Israelis and at the same time the Israelis must stop the violence against the Palestinians," he said.
Abbas has already persuaded the armed factions such as Hamas to observe a temporary "cooling down" period but they have stopped short of declaring an end to their campaign of anti-Israeli attacks.
A senior aide to Sharon said the meeting would not focus on negotiations over the Middle East road map which targets the creation of an independent Palestinian state alongside a secure Israel.
"This summit will be an occasion for declarations, which will be of great significance, but it is still too early to have political negotiations on the road map," the Israeli official said.