SHARM EL-SHEIKH, Egypt - The Israel Defense Forces is preparing to evacuate the Philadelphi route, along the Gazan-Egyptian border, sometime after the disengagement from Gaza is completed, according to a tentative understanding reached by Defense Minister Shaul Mofaz and Egyptian President Hosni Mubarak at a meeting here yesterday, Israeli security sources said.

Originally, the IDF had planned to remain at Philadelphi even after the disengagement, in order to prevent arms smuggling from Egypt into the Gaza Strip.

"The direction is already clear," said one Israeli security source. "It won't happen immediately, and apparently not as part of the disengagement, but the IDF will not remain on Philadelphi for long. Assuming that the disengagement from the Strip is carried out in coordination with the Palestinians, that the Egyptians assist, and that the volume of smuggling declines - we will leave Philadelphi."

The sources said they believe that Egypt will crack down on cross-border arms smuggling, both to placate Washington and because of worries over the growing ties between Islamic extremists in Egypt and Gaza.

"Over the long term, there's no reasonable way to hold on to Philadelphi," a senior IDF officer in the Southern Command added, explaining that the narrow area around the road would quickly become a focus of Palestinian attacks, much like the Har Dov (Shaba Farms) region on the Lebanese border.

Mofaz, speaking to journalists after the meeting, said merely: "We have not yet decided that the IDF should leave Philadelphi. If the smuggling stops, we'll consider it."

Prime Minister Ariel Sharon has long favored leaving Philadelphi along with the rest of Gaza, but bowed to the objections of the IDF and Shin Bet security service, which feared that once Israel left, Palestinian terrorists would be able to smuggle in large quantities of sophisticated weaponry.

Mofaz and Mubarak also made progress in ironing out details of an agreement to deploy 750 Egyptian border policeman on the Gazan-Egyptian border to fight the smuggling. Both sides hope the agreement will be signed by the end of the month, and the policemen would then start work in April.

Mubarak consented to the establishment of a joint Egyptian-Israeli liaison office on the border, which Israel had wanted. Originally, Egypt had proposed that the Israeli and Egyptian border forces coordinate through their respective army headquarters in Cairo and Tel Aviv.

Mofaz said the Egyptians also acceded to his request to carry out anti-smuggling operations in the interior of the Sinai peninsula, and not only along the Gazan border, "with the goal of stoppling the smuggling there."

Mofaz expressed no objection to Egypt's decision to invite all the Palestinian factions for talks in Cairo next week. However, as reported in Haaretz yesterday, senior IDF officials believe that Egypt is thereby insulating Hamas from Palestinian Authority pressure.

Egyptian Intelligence Chief Omar Suleiman, who accompanied Mubarak to the meeting, said he believes that Hamas is en route to becoming a political party rather than an armed organization, "but this [process] is still very fragile, and we need to strengthen this trend."

PA Chairman Mahmoud Abbas said yesterday that he hopes to get all the Palestinian organizations to agree to a cease-fire with Israel at the Cairo talks.

Mofaz described the atmosphere at the meeting as "very positive," saying his impression was that the Egyptians "want to help where they can. They have a genuine desire to move the [Israeli-Palestinian] process forward."

However, this did not stop Mubarak and his entourage from criticizing the ongoing delays in the planned transfer of five West Bank cities to PA control. Suleiman accused Israel of being too cautious and stingy over this issue, warning that without more Israeli generosity, the diplomatic process would not move forward.

The Egyptians acknowledged that the delay in transferring Jericho, the first town on the list, appeared to stem from technical problems, and that an effort was evidently being made to solve these problems quickly. But Israeli defense officials said the demand made by the Palestinians on Wednesday - that all three IDF checkpoints around Jericho be removed - was completely unacceptable, adding that Mofaz did not give the Egyptians a timetable for handing over the cities.

The Egyptians also told Mofaz that their new ambassador will arrive in Tel Aviv shortly, possibly early next week.

Meanwhile, Lieutenant General William Ward, the American "security coordinator" who will be overseeing reforms of the PA security services, has already arrived in the region and begun work, alongside a team of several dozen advisers, Haaretz learned yesterday.

Arnon Regular contributed to this report.