Jewish settlers and their supporters protested outside parliament for a second day Monday against Israel's planned withdrawal from Palestinian territories, demanding that Prime Minister Ariel Sharon (search) hold a referendum on dismantling settlements there.

The protest came as a de-facto truce between Israel and Palestinians took hold. Senior officials from the two sides were to meet later Monday to finalize a handover of security control of West Bank towns to the Palestinians.

Testing the informal cease-fire, a 10-year-old Palestinian girl was fatally shot in the head at a United Nations school in Gaza's Rafah refugee camp, Palestinian and U.N. officials said. Palestinian officials said the girl was hit by Israeli tank fire while standing in the schoolyard. U.N. officials could not confirm the source of the gunfire, but said it came from the direction of nearby Israeli military positions.

The Israeli army said it did not know of any shootings in the area, but said it would investigate in coordination with the Palestinians.

Shortly after the shooting, the militant Hamas (search) group claimed it fired five mortar rounds at a Jewish settlement in Gaza in retaliation. The Israeli army said two mortars landed in the Neve Dekalim settlement, causing no injuries but damaging one home.

Sunday's rally, which drew an estimated crowd of 130,000, was one of the largest in Jerusalem's history. Hundreds of demonstrators wore orange shirts, the color adopted by opponents of the Gaza withdrawal, and some pledged to try to disrupt the evacuation of Gaza settlements, set for this summer.

"Ariel Sharon, you have no mandate to expel Jews," Effie Eitam, a pro-settler lawmaker, told the crowd.

Several hundred settlers spent the night in tents outside parliament, and resumed their demonstration Monday.

However, the protest was unlikely to deter Sharon, who has stabilized his coalition government with backers of the withdrawal. With a recent drop in violence, Sharon has also stepped up contacts with the Palestinians.

Sharon and Palestinian leader Mahmoud Abbas (search) were heading toward their first summit since mid-2003, when Abbas was prime minister. Feb. 8 was emerging as the date for the summit, and Secretary of State Condoleezza Rice will arrive in the region two days earlier.

In the latest signs of warming ties, Israeli Defense Minister Shaul Mofaz scheduled a meeting later Monday with Palestinian negotiator Mohammed Dahlan (search), their second in three days, Israeli officials said.

The officials said the men were expected to complete preparations for handing over security control to the Palestinians in several West Bank towns and a possible Israeli release of hundreds of Palestinian security prisoners.

Palestinian police commanders said they were told to prepare to take control of four West Bank cities — Ramallah, Qalqiliya, Tulkarem and Jericho — as early as Wednesday. However, Israeli officials said no steps would be taken ahead of Thursday's meeting of the Security Cabinet.

Palestinian security officials said they were told by their Israeli counterparts that troops also would take down some roadblocks, rolling back security measures imposed after violence erupted in September 2000.

Abbas has won a commitment from militant groups to stop attacks, and Israel has scaled back military operations in return, though a formal cease-fire has not been declared yet.

An Israeli official said Sunday that Israel would grant an amnesty to West Bank fugitives, ending its relentless search for dozens of militants suspected of planning or executing attacks. In four years of conflict, dozens have been killed in Israeli raids and many more have been arrested.

The amnesty would allow Abbas to fulfill a key campaign pledge made before he handily won a Jan. 9 election to replace the late Yasser Arafat (search) — that fugitives would be allowed to reintegrate into Palestinian society with no fear of Israeli reprisal.

Israel's army chief met Monday with senior officers to discuss the scope and timing of a Palestinian prisoner release, another key Palestinian demand, defense officials said.

Abbas wants some of the approximately 7,000 Palestinians held by Israel freed.

Mofaz said Sunday that prisoners who killed Israelis could not be freed in the near term, but he left open the possibility that criteria could be eased in the future.