Israel has agreed to a number of confidence-building measures to ease the plight of West Bank Palestinians in the first meeting in more than a decade between Palestinian president Mahmoud Abbas and a senior Israeli minister.
However, Israel's hardline prime minister Naftali Bennett was quick to stress that the talks between defence minister Benny Gantz and Mr Abbas in Ramallah on Sunday night do not herald the end of the diplomatic deadlock.
“There is no diplomatic process with the Palestinians, nor will there be one,” a source close to Mr Bennett said, stressing that the discussions focused on security co-operation.
Mr Gantz said Israel had agreed to grant residency rights to thousands of West Bank Palestinians with no legal status – mostly Palestinians from Gaza or foreigners married to Palestinians – and will advance to the Palestinian Authority €131 million in taxes Israel collects on the authority's behalf.
Israel will also issue permits for an additional 15,000 Palestinians to work inside Israel.
Despite the goodwill gestures, a spokesman for Hamas – which controls the Gaza Strip – denounced the meeting as a "stab in the back of the Palestinian people and their sacrifices". The meeting was a "betrayal of the blood of the martyrs", said Abdel Latif Qanou.
A similar condemnation came from Islamic Jihad. "The blood of children killed by the army on Gantz's orders has not yet dried, even as president Abbas meets him in Ramallah," Islamic Jihad spokesman Tariq Silmi said in a statement.
The last meeting of a similar stature took place between former prime minister Binyamin Netanyahu and Mr Abbas in Jerusalem in September 2010. Since then the peace process has been deadlocked.
Israel’s hardline prime minister is opposed to Palestinian statehood and supports annexing the West Bank. However, some left-wing members of his wafer-thin coalition support the idea of an independent Palestinian state in the West Bank and Gaza.
The coalition partners agreed on a middle path – no annexation and no steps towards a Palestinian state, essentially continuing the diplomatic deadlock of the past decade.
The meeting in Ramallah came just two days after Mr Bennett met at the White House with US president Joe Biden. Mr Biden reiterated his view that a negotiated two-state solution was the only viable path to achieving a lasting resolution to the Israeli-Palestinian conflict.
He urged Israel to take “steps to improve the lives of Palestinians and support greater economic opportunities for them”.
Following the May fighting between Israel and Palestinian militants in Gaza, Mr Gantz said the Palestinian Authority must be supported. Israel is concerned that the ongoing economic and political crisis in the West Bank may lead to the collapse of Fatah rule and its replacement by Hamas.