Israel's Defense Ministry has mapped out a new route for the separation barrier in the West Bank that heeds a Supreme Court order to reduce hardships for Palestinians and runs closer to the Israel's 1967 border, officials said Monday.

In the West Bank, a solution appeared near in the political crisis for Yasser Arafat, as his prime minister was reported ready to rescind his resignation.

Palestinian officials said Prime Minister Ahmed Qureia (search) was weighing assurances from Palestinian leader Arafat that he would have more authority to make reforms.

Qureia could announce the withdrawal of his resignation letter after a meeting Tuesday with Arafat, which would end a two-week standoff and ease the turmoil in the Palestinian territories.

Quriea resigned earlier this month in frustration at Arafat's refusal to let him carry out reform in the security forces and deal with growing turmoil in the Palestinian areas.

Elements of the new route for the barrier will be presented this week to Prime Minister Ariel Sharon and Defense Minister Shaul Mofaz (search) for their approval, security officials said on condition of anonymity.

Details of the new map were not available, but the officials said it would run much closer to the internationally-recognized cease-fire line of 1967 than originally planned.

The decision to redraw the route was in line with an order by the Israeli Supreme Court last month to make the barrier less disruptive of Palestinian lives. But it ignored a ruling by the International Court of Justice (search) — the U.N.'s highest judicial body — that the barrier was illegal and must be completely torn down.

Acting on the world court's judgment, the U.N. General Assembly overwhelmingly passed a resolution last week calling on Israel to dismantle the barrier and compensate Palestinians whose lands were confiscated.

The system of fences, walls and razor wire cuts into the West Bank at several points, keeping Palestinians from reaching jobs, school and their farmland. About one-fourth of the barrier has been built and it will eventually run 425 miles.

Israel says the structure prevents suicide bombers infiltrating from the West Bank. Nearly 1,000 Israelis have been killed in Palestinian attacks in nearly four years of fighting. Palestinians argue that the barrier could become a new political boundary, effectively annexing large parts of the West Bank.

The Supreme Court ordered Israel to reroute 19 miles in the Jerusalem area, responding to a specific appeal by residents.

But Defense Ministry experts also were altering the route significantly in the southern sections of the West Bank where construction has not yet begun, the security officials said.

In Jerusalem, the route encircles east Jerusalem, the Arab-populated half of the city that was part of Jordan until Israel captured it in 1967 and annexed it shortly afterward.

Israel built large Jewish residential areas in the annexed part of the city, which Palestinians consider to be part of the occupied territory.

Palestinian Cabinet Minister Saeb Erekat (search) said the new changes were inadequate. The barrier should adhere to the 1967 border, allowing Palestinians control over east Jerusalem, he said.

"In Jerusalem, Israel should put the wall on the Green Line," Erekat said. "As long as its not on the Green Line, it's not acceptable."

Also Monday, Israeli troops shot and killed a 50-year-old Palestinian woman in the Gaza Strip town of Khan Younis as she slept in her bed, Palestinian witnesses said. The Israeli army said troops in the area came under fire and shot back, but knew nothing of about any casualties.

Tensions were high in the Khan Younis area after Palestinians fired mortars at the nearby Jewish settlement of Neve Dekelim on Sunday, wounding six children. Israeli tanks returned fire, wounding nine people.

Meanwhile, the Israeli Supreme Court rejected a request by nuclear whistleblower Mordechai Vanunu (search) to ease restrictions against him.

Vanunu completed an 18-year prison term in April for giving a British newspaper pictures and information about an Israeli nuclear reactor where he had worked as a technician. The state has prohibited Vanunu from leaving the country for a year and from granting interviews to the foreign media.

Israel refuses to discuss its nuclear capabilities, but published reports say it may possess up to 300 nuclear warheads.

A senior American envoy, Elliot Abrams, was due to visit Israel next week to discuss Sharon's plan to pull Israel out of army installations and settlements in the Gaza Strip by October next year, U.S. officials said.