Bloodshed continues as Arafat and Peres talk peace

Israel and the Palestinians today agreed on a series of "confidence-building measures" aimed at ending a year of fighting.

The measures were announced after peace talks in Gaza between the Palestinian leader, Yasser Arafat, and Israel's foreign minister, Shimon Peres. The US hopes that an end to the conflict would bolster support from Arab and Islamic states for the anti-terror coalition.

Mr Arafat greeted Mr Peres outside the VIP hall at Gaza International Airport. The two leaders shook hands - looking very grim - then walked along a red carpet into the building.

After the meeting, the two sides said they would resume security co-ordination and "exert maximum efforts" to enforce a ceasefire. Israel is to ease movement restrictions that have disrupted life in Palestinian areas.

The meeting came just hours after three Israeli soldiers were injured as a bomb esploded in a tunnel dug next to an army post near the Israel-Egypt border. Army Radio said two of the injured were in moderate condition and the third was lightly hurt.

Even as they talked, a 14-year-old Palestinian boy was killed and 11 youngsters wounded as Israeli troops fired on protesters just three miles from the Gaza airport where the talks were held.

The Israeli Prime Minister, Ariel Sharon, is deeply sceptical about efforts to negotiate a ceasefire. He has portrayed Mr Arafat as an unrepentant terrorist and said he cannot be trusted.

International pressure on Israel included a visit yesterday by the British Foreign Secretary, Jack Straw, to Mr Sharon. They spoke for around 80 minutes and a Foreign Office source described the meeting as "constructive and convivial".