The agreement in principle will come into effect immediately after Israel's pullout from Gaza in August, public radio reported on Tuesday, citing Western diplomatic sources.
According to the report, Palestinians will be able to travel between the West Bank and Gaza in convoys escorted by Israel in the immediate aftermath of Israel's pullout.
Israeli and Palestinian officials were not immediately available to comment on the report.
Ministers to meet
Israeli Prime Minister Ariel Sharon is to convene ministers on Tuesday for a top-level meeting to discuss the state of preparations for Israel's Gaza pullout.
Sharon is to preside over a joint meeting of the parliamentary foreign affairs and defence committee and the parliamentary legislation committee which will start at 11.30am (0830 GMT).
Defence Minister Shaul Mofaz, Internal Security Minister Gideon Ezra and Attorney-General Menahem Mazuz will also attend the meeting, along with the chief of police Moshe Karadi, public radio reported.
The 10-week pullout, which is due to start in mid-August, will see all troops and Jewish settlers leave 21 settlements in Gaza and another four in the northern West Bank.