Palestinian leader Mahmoud Abbas (search) said Sunday that he has not been able to resolve a dispute with Israel over Gaza's vital border crossing with Egypt, but he hoped a deal will be reached "very soon."

The crossing into Egypt (search) is the Palestinians' most important link to the outside world. The Palestinians say free movement through the border will be essential for reviving Gaza's economy after a 38-year Israeli occupation. Israel wants to maintain some control over the border, fearing weapons could be smuggled into Gaza.

"We hope that we can reach a satisfactory solution for us, because it's important to have full freedom for people to come in and out," Abbas said. "This subject is under serious discussion, but there is no agreement at this time. ... We hope that we can reach solutions for all the crossings very soon."

Abbas spoke after a meeting with international Mideast envoy James Wolfensohn, who has been trying to broker an agreement over the border crossing and other economic issues surrounding the Gaza pullout.

Wolfensohn said he would be meeting with Israeli officials this week to discuss the dispute.

Israel has said it plans to construct a new border terminal at the point where Gaza, Egypt and Israel meet, near the Israeli communal farm of Kerem Shalom. Israel wants all goods and people flowing into Gaza to go through the new terminal and be inspected by Israeli personnel.

The Palestinians say they're willing to route imports through Kerem Shalom to preserve a customs union with Israel. But they want exports and people to go through the existing Rafah terminal inside Gaza, with inspections by third party monitors rather than Israel.

Palestinians say that without an agreement on that and other issues — including the opening of a harbor and airport — Israel's occupation of Gaza is not really ending.

After Sunday's meeting, Wolfensohn said the two sides were close to a deal on the removal of rubble from Jewish settlements.

Israel has evacuated all 21 settlements in Gaza and last week completed demolition of the homes left behind. Under an emerging deal, Israel would pay for the removal of hazardous materials, while the Palestinians would use recyclable debris for construction projects.

Wolfensohn said the Israelis already have agreed to pay for the cost of clearing the debris — expected to be about $30 million — and he has been meeting with private Gaza businessmen to discuss uses for the rubble.

Israel's army chief, Lt. Gen. Dan Halutz, said Sunday that he expects to complete the Gaza pullout around Sept. 15.

As part of an agreement with Egypt, Israel will withdraw its troops from a patrol road along the Gaza-Egypt border, and 750 Egyptian troops will deploy there to prevent arms smuggling into Gaza.

The Israeli Defense Ministry said Sunday the Egyptians would begin taking up positions along the border in the coming days.

The forces are to patrol along a volatile corridor on the Gaza side of the border where Israeli-Palestinian fighting has been particularly intense because of the arms smuggling.

Halutz told reporters he expects the forces to be effective in stopping gunrunning. "It is in the Egyptians' interest to prove that the border is blocked to smuggling," he told reporters, "and I assume they will carry out this obligation."

Israel and Egypt signed the agreement last week, overriding a demilitarization clause in the 1979 peace treaty between the two countries.

Separately, an Israeli Foreign Ministry official said Prime Minister Ariel Sharon is to meet with President Bush and British Prime Minister Tony Blair while in New York for the United Nations' 60th anniversary celebrations that begin Sept. 14.

The official, who spoke on condition of anonymity because Sharon's itinerary has not been finalized, had no further details on the meetings.