HIGHLIGHTS: Meeting First of A Series of Sessions to be Held||Talks Focus on Easing Burdens faced by Palestinians living West Bank Cities and towns under Israeli Occupation||Since Reoccupation Of Palestinian Population Centres More than 30 Palestinians have been killed, but no Israelis|| STORY: Israeli Foreign Minister Shimon Peres met with Palestinian Finance Minister Salam Fayed on Monday, the first face-to-face contacts on that level in months, officials on both sides said. (Read photo caption)

Yoram Dori, a spokesman for Peres, said the meeting lasted about 90 minutes and covered economic issues. Palestinian officials, speaking on condition of anonymity, said the session took place in a hotel in west Jerusalem, the Jewish side of the city.

Dori said the meeting was "the first of a series that will be held. There will be a continuation." He told The Associated Press that Peres would also meet other Palestinian officials.

With Israeli troops patrolling most Palestinian areas, and the two sides trading bitter recriminations, government ministers have not held any publicly announced meetings recently.

Peres has said the Israeli and Palestinian leaders should remain in contact despite the ongoing violence. Israeli media reported that Israeli Prime Minister Ariel Sharon had barred Peres from such meetings, but has now given him permission to see Palestinian officials responsible for economic issues and government reforms.

Peres had been expected to host a Monday evening meeting in Jerusalem with Fayed, and Interior Minister Abdel Razak Yehiyeh, according to Palestinian spokesmen Nabil Aburdeneh. Both ministers were appointed recently by Arafat during a Cabinet reshuffle.

The talks were to focus on ways to ease the burdens faced by some 700,000 Palestinians living in seven West Bank cities and towns under Israeli military control, according to an Israeli government official, who spoke on condition of anonymity.

Israel's occupation army launched its latest incursion into Palestinian cities after attacks that killed 31 Israeli civilians from June 18-20. Since then, more than 30 Palestinians have been killed, but no Israelis, and Israeli occupation troops have taken over all but one of the eight major Palestinian cities and towns in the West Bank.

The period marks one of the longest stretches without an Israeli fatality since the fighting broke out in September 2000, although Palestinian militants have attempted to carry out attacks daily.

The Palestinian leadership has demanded Israeli forces leave the West Bank cities, but Israeli officials have said it is open-ended.

Israeli forces could remain in Palestinian areas for up to one year, until Israel finishes fencing off the West Bank from Israel, a senior security official said Sunday. Until the fence is completed, an Israeli presence in Palestinian towns and cities would be critical for preventing attacks, said the official who spoke on condition of anonymity.

PHOTO CAPTION

Israeli Foreign Minister Shimon Peres pauses during a meeting of the Israeli Labor Party at Jerusalem's Israeli Parliament building, Monday, July 8, 2002. Peres said that Israeli Labour party will fight against an Israeli government's proposal that would prevent Arab citizens of Israel from purchasing land in some rural communities and would effectively restrict them to Jewish residents. (AP Photo/Pier Paolo Cito)