Israel's defense minister warned Wednesday that the handover of additional West Bank towns to Palestinian control will require greater effort by Palestinian police to disarm militants, but he stopped short of halting the process.

The handover of five West Bank towns was agreed upon at a Feb. 8 Mideast summit in Egypt. After delays and difficult negotiations, Israel transferred security control of the towns of Jericho (search) and Tulkarem (search) to the Palestinians during the past week. As part of the agreement, Palestinian fugitives in those towns were given limited amnesty by Israel.

But Israeli security officials said Wednesday that Palestinian security forces since have broken a promise to disarm the militants in the towns under their control. Fugitives also have fled to Tulkarem from other parts of the West Bank to take advantage of the promised immunity, the security officials said on condition of anonymity.

Defense Minister Shaul Mofaz said Wednesday that the handover of the additional towns — Qalqiliya (search), Bethlehem (search) and Ramallah (search) — was in jeopardy.

"The Palestinians' rate of progress on everything regarding arrests and their obligations is very slow to the point where nothing at all has been done," Mofaz told reporters at the central command. "This will make it difficult for us to hand over responsibility for the additional towns.

"Handing over responsibility is, after all, meant to give them the ability to prove their will to really fight terror, to take responsibility, to deal with wanted men, to stop people getting out (of the towns) to carry out attacks."

Still, Mofaz said discussions on handing over Qalqiliya would start soon.

Israel's chief of staff, Lt.-Gen. Moshe Yaalon, also criticized Palestinian efforts to rein in militants.

"Regrettably, we still don't see significant organization or sufficiently serious Palestinian activity to prevent terror, and as long as it doesn't happen, the threat exists," Yaalon said. "And in a number of places in the West Bank, particularly in the Nablus, Jenin and Tulkarem areas, there are still active terrorist squads who intend to carry out attacks during the coming days."

Opponents of a Gaza withdrawal, meanwhile, suffered a setback Wednesday when the spiritual leader of the ultra-Orthodox Jewish Shas Party (search), Rabbi Ovadia Yosef, resisted pressure from Gaza settlers and Likud rebels to support a referendum. Holding a referendum would delay and possibly scuttle the pullout, set for this summer.

Yosef is reluctant to introduce plebiscites into Israeli politics for fear that would expose Israel's ultra-Orthodox minority to referendum rulings on other issues. One such major issue would be drafting religious seminary students, who are now able to claim exemptions from three years of compulsory military service.

Shas legislator Nissim Zeev told Israel Army Radio that Yosef "doesn't want to create a precedent for a plebiscite on any issue."

Israeli Prime Minister Ariel Sharon was to meet Wednesday with two U.S. envoys to the Middle East, Elliot Abrams and David Welch, to discuss Israeli settlement expansion in the West Bank, a diplomat said.

The pair will ask Sharon about plans to expand the West Bank's largest settlement, Maaleh Adumim (search), by 3,500 more homes, in violation of the internationally backed "road map" peace plan, U.S. State Department officials have said.

The new neighborhood would drive a wedge between the West Bank and the eastern sector of Jerusalem, claimed by the Palestinians as a future capital.

Palestinian officials have condemned the project, saying it threatens peace prospects.

A U.N. expert on the Israeli-Palestinian conflict welcomed Israel's handover of West Bank towns, planned withdrawal from Gaza and release of Arab prisoners, but said more is needed to build on the two sides' Feb. 8 cease-fire.

"I think these are important moves in the right direction," John Dugard told reporters on the sidelines of the annual session of the U.N. Human Rights Commission in Geneva. "On the other hand, there are certain other issues that must be addressed if the peace process is to continue, if it is to last," he said.

In Algiers, Algeria, an Arab summit endorsed a text reaffirming a Saudi peace initiative approved in 2002. That initiative said Arab states were prepared to establish full diplomatic relations with Israel in exchange for its full withdrawal from occupied Arab territory, the creation of a Palestinian state and settlement of the Palestinian refugee issue.

Leaders at the summit also decided to market the plan better by sending a committee to explain it to Europe, the United States and other nations.

Israeli Foreign Ministry spokesman Mark Regev said the summit produced "nothing new."

"It appears that the Arab League preferred to churn out anachronistic decisions instead of being in step with the times," Regev said. "Of course the statement that peace is the strategic option of the Arab world is welcomed by Israel, but there was no program of action to implement that statement. It would have been truly refreshing to see the Arab League call on the Arab states to start a dialogue with Israel."