JERUSALEM - In a bold initiative, Egypt offered Wednesday to host a long-awaited Israeli-Palestinian summit next week, and Prime Minister Ariel Sharon accepted the invitation, Sharon´s office said.

Egyptian President Hosni Mubarak´s offer to bring Sharon and Palestinian leader Mahmoud Abbas to the Red Sea resort of Sharm el- Sheik on Tuesday boosts chances that the summit will indeed take place.

In recent days, there had been increasing bickering over what issues to raise in an Abbas-Sharon meeting, and disagreements remain over the scope of a Palestinian prisoner release, the fate of Palestinian fugitives and a West Bank troop redeployment.

The arrival of Secretary of State Condoleezza Rice in the region over the weekend also intensifies pressure on the two sides to attend the summit and settle some of their differences over what should be announced after such a meeting. It was not clear whether Rice would also fly to Sharm el-Sheik.

Palestinian officials could not immediately be reached for comment. Abbas was visiting Turkey on Wednesday and was to fly to Jordan later in the day. However, it appeared unlikely Egypt would have extended the invitation to Sharon without Abbas´ knowledge.

The trip to Egypt would mark a major achievement for Sharon whom Mubarak has steadfastly refused to meet since the hardline Israeli politician became prime minister in 2001. Israeli radios described the invitation to Egypt as "historic."

The invitation was offered during a hastily arranged meeting Wednesday between Sharon and Egyptian intelligence chief Omar Suleiman. A day before, Suleiman had held talks in Cairo with the leaders of Hamas and Islamic Jihad, Khaled Mashaal and Ramadan Shalah.

The intelligence chief´s unexpected trip to Jerusalem signaled that he made progress in winning a promise from the Palestinian militant groups to halt attacks on Israel.

Israelis and Palestinians have taken major steps toward a cease-fire in recent days, but have not yet agreed on a mutual truce declaration. Palestinian security forces have deployed in Gaza to prevent attacks, and Abbas has won an informal promise from militant leaders to suspend attacks, provided Israel halts military operations. Israel has said it will halt operations in Gaza and scale them back in the West Bank.

However, in recent days the two sides got bogged down in mutual accusations, following a spike in violence, including the killing of a 10-year-old Palestinian girl in Gaza on Monday. Each side has said the other was responsible for the death of the girl, which triggered a Palestinian mortar barrage.

In other developments Wednesday, a senior Israeli Defense Ministry official said the two sides plan to set up a panel to take some Palestinian fugitives off Israel´s wanted list, signaling progress toward easing a major source of contention. Israel has vigorously pursued fugitives during four years of fighting, killing or arresting hundreds, and is chasing several hundred more, the Palestinian Authority estimates.

Amos Gilad, the Defense Ministry official, told Israel´s Army Radio that Cabinet ministers are set to approve formation of the panel later this week.

Israel won´t go after Palestinian fugitives who hand in their weapons and sign a written agreement pledging not to carry out attacks against Israeli targets, Gilad said. Any fugitive who violates the pledge will again become a target, he added.

The Palestinians seek blanket amnesty for all fugitives. Abbas has said repeatedly he would not confront the militants, preferring to co- opt them. One idea is to bring them into Palestinian security forces.

Gilad brushed off criticism that ending the hunt for fugitives would be tantamount to pardoning Palestinians responsible for killing Israelis. "We have to include all the fugitives who stop being active. ... We are not talking about pardoning," Gilad said. "If they return to terror and if the attacks and the murders continue, then in the end we will return to a different type of vigorous activity," he said.

Referring to the relative quiet that has prevailed in the area in recent weeks, Gilad added, "There is an opportunity here that must be exploited. All quiet is built on understandings."

Israel´s Security Cabinet is to meet Thursday to discuss the agenda of the Abbas-Sharon summit.

The ministers are expected to approve the release of several hundred Palestinian prisoners, which would fall short of Palestinian demands, and the phased handover of five West Banks towns.

Palestinian Foreign Minister Nabil Shaath, meanwhile, said Rice told him a telephone call Tuesday that she is encouraged by progress in the region. "She thinks that there is an opportunity that should be seized, and she will work with both of us in order that this opportunity will be seized," Shaath said.

In another sign that the new Palestinian leadership is serious about reining in militants, Palestinian security forces destroyed a tunnel along the Gaza-Egypt border Wednesday. Israel has long demanded that the Palestinian security forces destroy the tunnels, often used by militants to smuggle weapons from Egypt into Gaza Strip. (Copyright 2005 Associated Press. 02/02/05)