The measure was approved by Ehud Olmert, the Israeli prime minister, during a meeting with top security officials, Ephraim Sneh, the deputy defence minister said.
He said Israel would dismantle 59 West Bank roadblocks in two phases - 24 at first and the rest later.
"We have prepared a plan that we intend to implement immediately, which deals with the crossings and the movements of Palestinians and increasing the number of Palestinians working in Israel," Peretz said.
"The smaller the humanitarian Palestinian distress is, the smaller the terror potential is," Peretz said. "Improving the Palestinians' standard of living is part of Israel's security concept."
|"The smaller the humanitarian Palestinian distress is, the smaller the terror potential is"|
Amir Peretz, Israeli defence minister
The announcement came after Olmert told Mahmoud Abbas, the Palestinian president, that Israel would take "immediate and concrete steps" to improve humanitarian conditions for the Palestinians.
Israel has previously refused to free Palestinian prisoners until one of its soldiers captured in a cross-border raid on June 25 is released.
A senior Israeli official has said that the prison service and the Shin Beth security service were drawing up a list of Palestinian prisoners, mostly women and minors, who could be released immediately.
West Bank arrests
Overnight, Israeli forces arrested nine Palestinians, including
Yasser Nazzal, head of the Popular Resistance Committees, in military operations in the West Bank, Palestinian security sources said.
|Nine Palestinians were detained during an |
Israeli operation in the West Bank
Israel Radio said that the arrested men were members of Islamic Jihad and Abbas's Fatah movement.
Al Jazeera's correspondent said the soldiers clashed with Palestinians who had been throwing stones.
Both groups have often fired rockets into Israel from the Gaza Strip, but the Popular Resistance Committees has been largely inactive in the West Bank.
Palestinian fighters in Gaza have fired more than 50 rockets since they declared a ceasefire in early December.
On Monday, an Israeli facility in north of the Gaza Strip was damaged in a rocket attack and four rockets landed on the town of Sderot.