RAMALLAH, West Bank (AFP) - Palestinian leader Mahmud Abbas called on Israel to make a swift response to demands for a mutual ceasefire with armed factions as a top official claimed some 900 Palestinian prisoners would soon be released by Israel.

Abbas held his first talks with a senior US official since his January 9 election after winning praise from President George W. Bush and Israeli Prime Minister Ariel Sharon for his efforts to end the armed uprising.

"We are interested in a mutual ceasefire. The Israelis have also told me that they are interested but they need to respond very quickly," Abbas told reporters. "There is no reason why they should delay any decision."

The new Palestinian has already secured an agreement from militant groups such as Hamas and the Al-Aqsa Martyrs´ Brigades for a "cooling down" period.

There has been a sharp reduction in attacks by militants over the past week from their Gaza stronghold where thousands of Palestinian security forces have been deployed with orders to prevent the firing of rockets.

However Abbas, speaking after talks with US Assistant Secretary of State William Burns, said the situation "cannot last for long".

The factions have said that they are willing to make a formal ceasefire declaration if Israel ends its military operations in the occupied territories and starts to release the 8,000 Palestinians being held in Israeli prisons.

A senior official claimed that Israel had already agreed in principle to release around 900 Palestinian prisoners.

"They have agreed to release around 900 in the first phase which I expect to take place in the near future," said the official who was present at talks on Wednesday with Sharon´s top advisor Dov Weisglass.

A source close to Sharon however denied any such agreement had been reached.

"The prisoner issue was raised at the meeting yesterday, and it is part of a range of issues which will be discussed between Abu Mazen (Abbas) and Prime Minister Sharon," he told AFP.

"We understand their concern and the importance of this issue to them but it will be discussed at the right time and in the right forum."

For his part, Sharon expressed his satisfaction at the moves by Abbas to reduce the violence on the ground.

"I am very pleased with what I hear about what is going on on the Palestinian side, and I very much want to work with him to make progress," he told the Yediot Aharonot daily.

"I intend to accommodate Abu Mazen and at the same time to keep my eyes open and to examine the situation on their side."

Israeli Foreign Minister Silvan Shalom however was distinctly cool on talk of a ceasefire.

"Anyone who thinks a ceasefire is the right thing to do, is mistaken. A ceasefire is a ticking bomb which will blow up in our faces," he told army radio.

Burns had a more upbeat assessment of the situation, detecting "the best chance for progress that we have seen in the last few years".

"The United States welcomes the steps that President Abbas and the Palestinian Authority have taken that have resulted in the return of order and security and the moves of the authority to reach a ceasefire.

"We are encouraged by the steps taken by Israel as a response to the Palestinian steps and we are pleased with yesterday´s meeting between Saeb Erakat and Dov Weisglass."

Bush himself paid tribute to Abbas at a press conference in Washington on Wednesday.

"I think you´ve seen something new that will help accelerate the (peace) process, and that is Abu Mazen, who has been elected by the Palestinians, who´s showed strong leadership," said the US president.

"He has declared that they will do everything they can to protect innocent life from terrorists, as well as consolidating security forces."

In another confidence-building move, Palestinian prime minister Ahmed Qorei signed a decree banning anyone but members of the security services from carrying weapons.

Both Qorei and Abbas have previously expressed a determination to end what they call the "armed chaos" on the Palestinian streets but they have always refrained from meeting Israeli demands to actively disarm militants. (Copyright © 2005 Agence France Presse. 01/27/05)