Israel eases West Bank restrictions

"We have prepared a plan that we intend to implement immediately, which deals with the crossings and the movements of Palestinians and increasing the number of Palestinians working in Israel," Peretz told a news conference.

Israel, he added, would dismantle 59 roadblocks in the West Bank in two phases -- 24 at first, and the rest later.

"The smaller the humanitarian Palestinian distress is, the smaller the terror potential is," Peretz said, speaking after a meeting of the parliamentary foreign affairs and defence commission.

"Improving the Palestinians' standard of living is part of Israel's security concept."

The announcement of the measures follow a promise by Prime Minister Ehud Olmert during a weekend meeting with Palestinian president Mahmud Abbas of "immediate and concrete steps" to improve humanitarian conditions for the Palestinians.

Peretz told reporters that certain Palestinian prisoners held in Israel would be released to mark Christmas and the upcoming Muslim feast of Eid-ul-Azha, due to begin at the end of December, depending on the sighting of the moon.

This would be in line with Israel's policy each year of freeing prisoners to mark the two festivals, he added.

"This humanitarian gesture should not delay the release of Gilad Shalit (an Israeli soldier captured by armed Palestinians on June 25) and I hope on the contrary it will speed up (the release)," he added.

"They are humane gestures and ... are designed to create a positive dynamic," Peretz said.

Israel has until now refused to free Palestinian prisoners before Shalit is released.

A senior Israeli official said Israel's prison service and the Shin Beth internal security service were drawing up a list of Palestinian prisoners, mostly women and minors, who could be released immediately.

The announced measures are seen as an attempt by Israel to bolster Abbas and his Fatah movement in the face of a bitter power struggle with the radical Hamas-led Palestinian government.