Israel and Egypt signed an agreement Thursday for the deployment of 750 Egyptian policemen along the Philadelphi route.

The deal was signed in Egypt between the head of the Operations Division in the General Staff, Major General Yisrael Ziv, and his Egyptian counterpart, General Mohammed Fahrani. It followed Knesset and government approval of the agreement this week.

The sides have agreed that the Egyptians will begin deployment on September 15, and that the last of the Israel Defense Forces soldiers will withdraw from outposts along the route some two weeks later, thus completing the IDF's pullout from the Gaza Strip.

The IDF will not, however, destroy the steel and concrete wall it built facing Rafah. Israel has demanded that the Palestinian Authority not destroy the wall, and assist in efforts to prevent arms smuggling.

The General Staff noted several advantages to the agreement: Egypt has committed to combat both arms smuggling and terror in Sinai. The parties will also exchange intelligence on a 24-hour-a-day basis. The IDF tends to minimize criticism of the agreement, to the effect that it deviates from the principle of the demilitarization of Sinai, established in Israel's peace treaty with Egypt.

Palestinians ready to consider continued Israeli inspection The Palestinians are ready to consider continued Israeli inspection of goods entering the Gaza Strip, the Palestinian foreign minister said Thursday, signaling a possible breakthrough in a key dispute over border arrangements after Israel's pullout from the coastal strip.

The foreign minister, Nasser al-Kidwa, insisted however, that Israel could not have control over people entering and leaving Gaza through the Rafah crossing on the Gaza-Egypt border.

As part of the Gaza pullout, Israel will leave the narrow strip it had been patrolling on the Gaza-Egypt border. This means Israeli inspectors will have to leave the Rafah crossing.

However, Israel is reluctant to give up control over people and goods flowing into Gaza, fearing militants could try to smuggle weapons into the coastal strip.

Egypt and the Palestinians have proposed deploying foreign inspectors at Rafah to prevent smuggling, but Israel has rejected the idea.

Instead, Israel has proposed moving the Rafah crossing to a three-way meeting point between Egypt, Gaza and Israel - which would allow the continued presence of Israeli inspectors.

The Palestinians initially rejected the idea, but al-Kidwa told a news conference Thursday, "we would consider having goods come in the way Israel has proposed, at a trilateral crossing," he said.

Meanwhile, Israel is due to start constructing a new border-crossing terminal at Kerem Shalom on the Israel-Egypt-Gaza border next week, despite opposition from Egypt and the Palestinian Authority.

Defense Minister Shaul Mofaz is to meet Thursday with Palestinian Authority officials about the terminal, whose control is a major post-disengagement issue.

Israel wants the entry from Egypt into the Gaza Strip to be via the Kerem Shalom terminal even after disengagement, so it can monitor customs on goods, and security. It is threatening to exclude Gaza from the customs union with Israel and the West Bank if the Palestinians insist on running the terminal on their own.

Work on the site is to begin immediately after the committee for security facilities in the south meets to approve the allocation of land for the Kerem Shalom terminal, scheduled for Monday. The Defense Ministry has approved the initial outlay for the project.