Tel Aviv, Israel, Feb. 4 (UPI) -- Israeli-Palestinian talks designed to ensure a smooth summit meeting in Sharm el-Sheikh, Egypt, hit a stumbling block Thursday over the release of Palestinian prisoners.

The obstacle emerged at the end of a day in which Palestinian President Mahmoud Abbas announced a cease-fire, Israeli ministers approved a series of confidence-building measures and some Palestinian militants continued attacks against Israel.

Talks were supposed to reach agreements ahead of Tuesday´s summit meeting due to be attended by Egyptian President Hosni Mubarak, Jordan´s King Abdullah, Israeli Prime Minister Ariel Sharon and Abbas, who is also known as Abu Mazen.

The argument focused on the prisoner-release issue. Palestinians reportedly wanted Israel to also release prisoners serving long prison terms. The Haaretz newspaper said they demanded the release of 237 prisoners jailed before the 1993 Oslo accords were signed. Several, such as Marwan Barghouti former leader of the Fatah Tanzim in the West Bank, were members of the Palestinian Legislative Council. Barghouti is serving multiple life sentences for his role in several deadly attacks. The Israelis said they were unwilling to release "prisoners with blood on their hands."

Minister without portfolio Haim Ramon told Israel Radio Wednesday the original plan brought before the ministerial committee talked of releasing 500 prisoners who had anywhere from a few months to three or four more years of their terms left to serve. Almost all were members of the ruling Fatah Party.

"Since we could not show flexibility on the ´quality´ of the prisoners" the ministers decided, "to be flexible with the quantity." Sharon proposed increasing their number to 900, Ramon said. Israel is holding some 8,500 Palestinian prisoners.

According to Israel Radio, the Palestinians complained Israel´s offer was "insulting."

An Israeli official, who spoke to United Press International, on condition of anonymity, said he believed militants agreed to a cease- fire because they expected Israel to release some of their comrades. They are now pressuring Abbas to get their friends, he said.

"If they leave the talks, it is their responsibility," a source in the Prime Minister´s Office told UPI. "They never received such gestures (as Israel is ready to give). He (Abu Mazen) cannot take advantage of the Sharm (el-Sheikh) event to skip the stage of fighting terror. This is against the ´road map´" for peace the United States, Russia, the European Union and the United Nations have presented.

The official was referring to a Palestinian desire to broaden the talks to cover non-security issues and discuss the final agreement with Israel. Israel insists on fighting terror first.

The "gestures," or confidence-building measures, the ministers approved Thursday and that will be brought to Tuesday´s summit include:

-- Israel´s transfer of responsibility for security in five West Bank cities. Jericho will be the first, and the others are Bethlehem, Qalqilya, Tulkarim and Ramallah. Ramallah will be the last of the five "because it is the most complicated," Ramon said.

Nablus and Jenin are not on the list because they are considered the most dangerous.

The Israeli army is hardly inside those cities but does go in at will. Ramon said there would be a difference between going in now and doing so later, after it transfers security responsibility.

"We´ve got to be very careful. We should not give them responsibility if they have no ability (to control the militants)," Ramon said.

Thus Israel will see how the Palestinian Authority copes with a quiet city such as Jericho, before offering the next one.

Israel is preparing to open two more Gaza border crossings, at Karni and Erez, lift a closure around Gaza, issue more permits to enter Israel, and establish a committee that will remove Palestinian militants from a list of wanted people.

The committee is to consider each case. The militants would have to surrender their weapons to the Palestinian Authority, sign an undertaking not to engage in fighting, remain in their cities and be under Palestinian Authority supervision.

The militant "should be under probation and if he does act, Israel will have an address (responsible for him)," the source in the Prime Minister´s Office said.

The army and Shabak security service already have new orders limiting the local commander´s leverage to enter areas to arrest suspects. The head of the Shabak or his deputy must approve every planned arrest, an authoritative source confirmed. On Friday, Military Chief of General Staff Lt. Gen. Moshe Yaalon issued new orders requiring his personal approval for every targeted killing of militants. He would approve such action for "immediate operational needs" against "active terror squads," the army spokesman reported.

"We want the Palestinian people to understand that they have so much to gain from the path of negotiations, from the path of diplomacy and from the path of non-violence," Foreign Ministry spokesman Mark Regev said.

The measures the ministers approved are "designed to show the Palestinians that this process can make their lives better. These gestures are not easy for us.... Pulling out of the cities will bring us a security risk (and) as we saw today the terrorist threat has not receded," he added.

The Shabak still has a list of 50 alerts of planned attacks. On Wednesday, police hurriedly fanned out in Jerusalem following a Shabak warning a militant was on his way in town.

At the Hawarah checkpoint, south of Nablus, an officer Wednesday caught a 16-year-old boy carrying a suicide belt, an improvised rifle and 20 bullets.

In Gaza, soldiers went to help Palestinians whose taxi seemed to have stalled near a crossing. A militant emerged from the cab, hurled grenades and wounded two soldiers. The Israelis returned fire, and killed him, the army spokesman said.

In the southern West Bank, Palestinians ambushed an army patrol wounding four soldiers, Danny Kapah, the settlers´ security officer there reported. (Copyright 2005 United Press International 02/04/05)