Israeli Foreign Minister Shimon Peres has met with Palestinian Finance Minister Salam Fayed in their first face-to-face contacts in several months.
Mr Yoram Dori, a spokesman for Mr Peres, said the meeting lasted about one and a half hours and covered economic issues.
Palestinian officials said the meeting took place in a hotel in west Jerusalem, the Jewish side of the city.
Mr Dori said the meeting was "the first of a series that will be held. There will be a continuation." Mr Peres will also meet other Palestinian officials.
After Palestinian leader Mr Yasser Arafat reshuffled his Cabinet a month ago, Mr Peres pressed for and received permission to talk with some of the five new ministers.
However, Mr Sharon insisted that the talks be confined to economic and humanitarian issues, not political matters.
Before the meeting, Palestinian Cabinet Secretary Mr Ahmed Abdel Rahman played down their importance, saying this was another effort by the Israelis to dictate to the Palestinians who their leaders would be.
PA