JERUSALEM -- Israel and the Palestinian authority agreed late Sunday on a tentative plan to allow Israel to wind down its reoccupation of Palestinian towns, but deep mistrust between the sides and opposition of Islamic hardliners pose major obstacles to the project.

Under the revised "Gaza First" plan, Israeli forces will gradually leave positions they have taken in Palestinian self-rule areas since the start of the uprising, or Intifada, in September 2000.

In return, Palestinian security forces, under the new command of Interior Minister Abdel Razaq al-Yahya, will take control of the areas and rein in militant groups attacking Israeli targets.

Israeli officials insisted that the process would be a gradual one, aimed at restoring the confidence shattered by almost two years of bloodshed without compromising security issues, conscious that one suicide bomber could destroy the whole project.

"This is a glimmer of hope rather than a breakthrough," said senior Foreign Ministry official Mark Sofer.

"This is not a fixed program with an established timetable. If the Palestinians take control of the security situation, we'll immediately ease the humanitarian and financial situation," he told AFP. "Security for us is the crux around which everything else revolves," he said adding that Israel was taking "a calculated risk."

Nabil Abu Rudeina, a close advisor of Palestinian leader Yasser Arafat, said his side was still wary of Israel's commitment to a withdrawal.

"The most important thing is for Israel to carry out the agreement ... Israel usually does not respect agreements," he said.

Sofer said the Palestinian security forces in Gaza, still more or less intact despite Israeli attacks on their bases, were capable of taking the situation in hand.

He said the Palestinians had assured Israel they were capable of doing the same in Bethlehem in the southern West Bank, despite two months of Israeli occupation of the entire West Bank to clamp down on militant groups.

Israel had proposed starting the project in the Gaza Strip, but expanded it to Bethlehem amid Palestinian fears that Israeli forces would sit tight in the West Bank.

Efraim Inbar, an Israeli analyst at the Besa Center for strategic studies at Bar-ilan University, said security had more to do with the Palestinian leadership's mindset than its military might.

"You don't need too many guns, you need political determination to have law and order," he said, adding that Bethlehem has a large Christian population with a less militant bent.