The Palestinians agreed Thursday to allow Israeli inspectors to monitor goods entering the Gaza Strip (search) to safeguard against arms smuggling, yielding a key point in the final phase of Israel's (search) Gaza pullout.

Egypt (search) will begin deploying troops on the Gaza border by Sunday, Israeli defense officials said, marking another milestone in ending the 38-year occupation, even though more work remains to be done on how the border will be supervised.

Concerned that Gaza could be a staging ground for terrorism and rocket attacks, Israel has insisted on monitoring people and goods entering the sensitive coastal strip to ensure against the smuggling of arms and explosives.

Palestinian Foreign Minister Nasser al-Kidwa said the Palestinian Authority (search) was ready to consider continued Israeli inspection of cargo at a new border terminal to be built at the junction of Gaza, Israel and Egypt. But Israel cannot have control over people, who would continue entering and leaving Gaza through the Rafah crossing, he said.

The Rafah crossing "should work for individuals, for people in both directions, and must work for goods in at least one direction, out of Gaza. We would consider goods to enter in the way Israel has proposed, in the trilateral crossing," al-Kidwa said in the West Bank town of Ramallah.

Egyptian and Israeli generals were to sign an accord in Cairo later Thursday to allow 750 lightly armed troops to deploy in the area, overriding a demilitarization clause in the countries' 1979 peace treaty.

Israel's parliament approved the deal Wednesday after the details were settled by Defense Minister Shaul Mofaz and Egypt's intelligence chief Omar Suleiman.

Egypt has given Israel assurances it will block arms smuggling, but the difficulty of monitoring the frontier was evident even when Israel had total control, and smuggling was rampant via tunnels dug through the Mediterranean sand.

Israel reaped the first diplomatic benefit from the Gaza pullout when the Israeli and Pakistani foreign ministers met Thursday in the neutral venue of Istanbul, Turkey, in the first acknowledged high-level meeting between the Jewish State and the overwhelmingly Muslim country.

Israeli officials said the meeting between Israel's Silvan Shalom and his Pakistan counterpart Khursheed Kasuri was arranged at the request of Pakistani President Gen. Pervez Musharraf, a key U.S. ally in the Indian subcontinent, in response to Israel's Gaza pullout.

Another benefit could come with a visit from Jordan's King Abdullah II (search). The king has agreed in principle to visit, though a date hasn't been finalized, an official said on condition of anonymity due to the sensitive nature of the subject.

Israel and Jordan signed a peace agreement in 1994, but relations during more than four years of Israeli-Palestinian fighting have been strained. Abdullah's last public visit to Israel was in August 2000. The monarch reportedly made a secret visit in March 2004. Just two days ago, Abdullah also hosted Israeli Labor Party member Ehud Barak at an Amman hilltop palace.

The debate over relinquishing control of the Gaza border has become part of the internal rift in Israel's governing Likud Party, where hard-liner Benjamin Netanyahu (search) has challenged Prime Minister Ariel Sharon (search) in a leadership battle.

Staking out a position as the more compromising of the two, Sharon said Thursday that peace and security were his top priorities following the "disengagement" with the Palestinians in Gaza.

"One (priority), of course, is preserving Israel's security and the security of its citizens. And another is making every effort to advance in the peace process with the hope that we will one day achieve calm and also security and, God willing, also peace," he told students in northern Israel on the first day of the school year.

Netanyahu, who was prime minister from 1996-99, charged that Sharon gave up Gaza without getting anything in return, and made clear he would steer Israel on a tougher course in future peacemaking.

The evacuation of all 21 settlements in Gaza and four in the West Bank, completed last week, has widespread public backing. But Netanyahu has broad support among registered Likud Party members who control party institutions, giving Netanyahu a solid chance to unseat Sharon at party primaries that could happen before the end of the year.

Elections are set for late 2006 but Sharon's current government is widely expected to collapse before then.

Israel was due to complete the destruction of the homes of the 8,500 Jewish settlers who were evacuated last month and to remove the last 15 bodies from a cemetery near the abandoned settlement of Neve Dekalim for reburial in Israel.

The military had completed more than 90 percent of its work in dismantling its Gaza bases, leaving only a few bunkers and other installations to blow up before a Sept. 15 deadline, defense officials said.