What is needed now are actions and not words, said a spokesman for Palestinian Authority Chairman Mahmoud Abbas, Nabil Abu Rudeineh, following Prime Minister Ehud Olmert's speech yesterday.

"We need to sit down at the negotiating table in order to begin serious discussions based on the road map, the Saudi peace initiative, and primarily on United Nations Resolution 194 on the return of refugees," he said.

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Abu Rudeineh added that the only solution to the conflict is the creation of a Palestinian state within the 1967 borders and implementation of international agreements. "We need real negotiations and not just dialogue, we must deploy international forces to separate between the sides and allow for the implementation of all agreements," he said.

Palestine Liberation Organization chief negotiator Saeb Erekat said the Palestinians are ready to discuss a final agreement. "I believe Mr. Olmert knows he has a partner - Chairman Abbas," he said. "He knows that in order to achieve peace and security for all, we must discuss the final peace accord."

PA government spokesman Razi Hamad was suspicious of Olmert's proclamations. "This is a collusion, a new maneuver," he said. "Olmert speaks of a Palestinian state without detailing its borders."

A group identifying itself as part of the Al-Aqsa Martyrs' Brigades, the armed wing of Fatah, claimed responsibility for the firing of two Qassam rockets at Sderot yesterday. Nonetheless, it is unclear who is behind the fire, though it is believed to have been launched by an independently operating group of militants.

The Israel Defense Forces killed two Palestinians during an arrest operation in Qabatiya, near the West Bank city of Jenin. According to Palestinian sources, senior Popular Resistance Committees militant Abd A-Razik Bakhar, 22, and 55-year-old Fatma Nazal were killed in the raid.

Military sources said an elite unit in the Nahal infantry brigade identified an armed militant, and shot and killed him. The soldiers subsequently saw a figure approach the body and take the militant's weapon. The soldiers fired and hit the person, and only later realized it was a woman. Nazal does not have a history of security offenses. Military sources said that the dark conditions and the fact that Nazal was wearing pants and not a dress made it impossible to recognize that she was a woman.

The PRC issued a statement saying they will show restraint, but said it will discuss the "Israeli violations" of the cease-fire with the other Palestinian factions, and together will decide on an "appropriate response."

"The terrorist organizations need to understand that we are not in a time-out," said Defense Minister Amir Peretz during yesterday's cabinet meeting in Sde Boker. "We are still preparing for various responses on their part." Peretz said thwarting efforts by terrorist organizations to gain strength requires international participation, particularly from Egypt.

Peretz called Abbas' deployment of PA forces in Gaza to prevent rocket fire an important test. The defense minister emphasized that the deployment needs to be in areas from which rockets are fired, and said he has instructed the IDF to form teams to coordinate with deployed forces.