Updated

Israeli and Palestinian security commanders failed to reach agreement Wednesday on the handover of this West Bank town to Palestinian security control, participants said, a new setback to a truce agreement meant to end four years of fighting.

The dispute centers on the scope of the Israeli pullback, particularly whether Israel would remove the main army checkpoint at the entrance of town.

Plans to hand over Jericho and the town of Tulkarem in the coming days were announced Tuesday, after a late-night meeting between Israeli Defense Minister Shaul Mofaz and Palestinian leader Mahmoud Abbas (search).

Security commanders met for just 20 minutes Wednesday to discuss the details of the Jericho handover. Ismail Jaber, the Palestinian commander, said disagreements remained, and that negotiations would continue.

Israeli security officials confirmed the talks had failed but said the two sides would hold a second meeting later in the day. The officials declined to say when or where the meeting would take place.

Israeli forces had rarely operated in Jericho and Tulkarem in recent months. The Palestinians want surrounding areas to be included as well, but Israel has balked at removing major army checkpoints on the outskirts of these towns.

"The Israeli side, it appears, has no clear orders (from political leaders) to remove all checkpoints," Jaber said.

Israel agreed to turn over five Palestinian towns, including Jericho and Tulkarem, to Palestinian control as part of a truce announced at a Feb. 8 summit in the Egyptian resort of Sharm el-Sheik.

The handover has been held up, however, by a Palestinian bombing that killed five Israelis in Tel Aviv on Feb. 25. Tuesday's night's talks between Abbas and Mofaz were the highest-level discussions between the two sides since the bombing.

The deadlock over Jericho left the fate of Tulkarem up in the air and could spell trouble as the Israelis and Palestinians try to move forward to stickier issues. Jericho, a quiet town far from Israeli population centers, has been relatively quiet during the four years of fighting.

Israeli roadblocks are a key point for the Palestinians. Dozens of barriers have limited movement in and out of the towns, strangling social and economic life. Israel says the barriers are necessary for security.

"Without lifting the roadblocks, the handover will be meaningless," said Saeb Erekat, a Palestinian government official, who spoke by phone from Madrid.

He also said Israeli leaders agreed at last month's summit that the handover would include entire areas, including roadblocks.

"Yesterday, Abu Mazen raised this issue and showed him (Mofaz) the agreement in writing," Erekat said. Abbas is also known as Abu Mazen.

In Jericho, the military is particularly adamant about keeping the main checkpoint in place because it wants to prevent Israelis from reaching a casino in the town. Casino gambling is illegal in Israel, and before the outbreak of Israeli-Palestinian fighting in 2000, the Jericho casino was packed with Israeli gamblers.

The casino was closed a month after the start of fighting, and the army barred Israelis from entering West Bank towns. If the Jericho checkpoint is removed, the army would not be able to enforce the ban.

Erekat said there are no plans to reopen the casino and that the main Palestinian concern is to revive the battered economy by improving movement.

Palestinian Prime Minister Ahmed Qureia (search) accused the Israelis of dragging their feet. "With the exception of yesterday's meeting, all the meetings so far did not lead to the implementation of the understandings reached at Sharm el-Sheik," he told his Cabinet.

The militant group Hamas, which has largely observed the truce, also expressed impatience, hinting it might resume attacks on Israeli targets if there is no progress soon.

"The Zionist occupation is running away from the conditions agreed upon to restore calm," the group said in a statement released in Gaza. "They will find themselves at a crossroads, and they will be held fully responsible for the consequences."

Amos Gilad, a top aide to Mofaz, said in a radio interview the Palestinians' ability to prove they can halt terror after the Jericho handover is a condition for transferring other West Bank cities.

Previous West Bank transfers of authority have started with Jericho, including the first one in 1994, when Palestinian leader Yasser Arafat (search) first took control. Arafat died Nov. 11 and was succeeded by Abbas.

Under terms of interim peace accords in the mid-90s, Palestinians took control of West Bank population centers. However, after a series of grisly bombings, Israeli forces went back into the towns in 2002.

Since then, there have been several unsuccessful truces and handovers, but Israel always maintained roadblocks at the outskirts of the towns, effectively quarantining them.