Israel said Monday it had released some tax receipts owed to Palestinians for the first time since shortly after a Palestinian uprising flared in 2000 and more could be transferred if the funds are not misused. The gesture, together with a government decision to lift a much-criticized shutdown of an eminent Palestinian moderate's offices, could precede steps to ease the hardships of Palestinians in West Bank cities reoccupied by the Israeli army. Israel's military clampdown has dramatically reduced Resistance attacks but confrontations in the Gaza Strip between Palestinians and Israeli occupation troops guarding internationally illegal Jewish settlements goes on.

Palestinian officials said two Islamic Jihad militants were killed overnight in a clash with Israeli occupation troops near the Gush Katif settlement bloc in the south of the Mediterranean strip.

ISRAEL UNBLOCKS PALESTINIAN FUNDS

Foreign Minister Shimon Peres said Israel had handed over about 100 million shekels (20 million U.S. dollars) in customs and other tax funds frozen shortly after the second Palestinian intifadha, uprising against occupation, began in pursuit of independence in the West Bank and Gaza Strip.

Palestinian officials have said Israel, in withholding hundreds of thousands of dollars in accumulated revenue, is hampering their ability to carry out reforms and compounding the suffering of 700,000 Palestinians under curfews and blockades.

NUSSEIBEH INFORMED HIS OFFICE COULD OPEN

Sari Nusseibeh, president of al Quds University in East Jerusalem and a leading Palestinian advocate of nonviolence and compromise for peace with Israel, told Reuters he had been informed his office could reopen at 7 a.m. EDT. (Read photo caption)

Israel's interior ministry confirmed it had rescinded the shutdown in a move sure to please the United States, which had warned Israel that punishing Palestinian moderates would hurt efforts to foster Palestinian reforms deemed crucial for peace.

Israel had said Nusseibeh's premises were being used to advance Palestinian Authority interests in Jerusalem in violation of interim peace deals. Nusseibeh denied this.

PERES SAYS WITHDRAWAL CONTINGENT ON QUIET

Talks between the Palestinians and Israel resumed on Saturday and Peres told Palestinian officials that renewed violence was both delaying steps to relieve civilian suffering and keeping Israel from pulling troops out of West Bank cities.

"We don't want to reconquer Judea, Samaria (the West Bank) and Gaza. We really want to get out of there, the moment that the required level of security is reached," Peres said.

PHOTO CAPTION

Top Palestinian Liberation Organization official in Jerusalem, Sari Nusseibeh, speaks on a mobile phone, in front of the Al Quds University, in east Jerusalem Monday July 22 2002. Nusseibeh, said Israel public security ministry agreed to end the closure of his east Jerusalem office building, Monday, after he made a formal statement denying Israeli charges that the premises were a front for the Palestinian Authority.(AP Photo/Vadim Ghirda)
- Jul 22 7:17 AM