Top Israeli adviser Dov Weisglass held talks with Palestinian negotiations minister Saeb Erekat, officials said.

The meeting followed Israeli Prime Minister Ariel Sharon's decision to lift a freeze on diplomatic contacts.

Wednesday's talks are seen as paving the way for a summit between Mr Sharon and Palestinian leader Mahmoud Abbas.

Ties were frozen after six Israelis were killed in an attack in the Gaza Strip earlier this month.

According to Palestinian officials, an agreement has been reached to deploy Palestinian security forces in the southern Gaza Strip within 24 hours in an effort to reduce attacks on Israel.

Israel is also reported to have agreed to stop the targeted killing of Palestinian militants.

But there was fresh violence on Wednesday. A three-year-old girl died in the Gaza Strip after Israeli troops opened fire, Palestinian doctors said.

The Israeli army was unable to confirm the report, but said troops had opened fire in retaliation for a rocket attack on southern Israel by militants.

The rockets - the first to be fired into Israel for eight days - caused no casualties.

There has been a marked drop in violence since Palestinian security forces were deployed along the Gaza-Israel border last week.

Killings 'halted'

The BBC's Jon Leyne in Jerusalem says the meeting between Mr Weisglass and Mr Erekat was the latest stage in the rapidly improving relations between Israel and the Palestinians.

The two men are thought to have discussed a possible summit between Mr Sharon and Mr Abbas, but no date has been announced for such a meeting, our correspondent says.

At the same time, Israel has said it will not carry out targeted killings of Palestinian militants in areas where Palestinian police can assure security, according to reports.

Israeli security officials, speaking on condition of anonymity, told news agencies that the Palestinians had been informed of the change in policy.

The move is a key Palestinian condition for a truce with Israel to end four years of violence.

Israel has assassinated a number of senior leaders of militant groups such as Hamas and Islamic Jihad in recent months in an effort to curb their attacks on Israelis.

Since taking office, Mr Abbas has deployed Palestinian security forces in the northern Gaza Strip with orders to stop the firing of rockets and mortars into Israel.

On Tuesday, Hamas issued a statement saying it was considering a temporary truce.

But Hamas leader Khaled Meshaal told the Associated Press news agency the group would respond to any new attacks by Israel.