A memorandum of understanding between the U.S. and Israel on security and intelligence cooperation aimed at countering the smuggling of arms into the Gaza Strip is being prepared and may be signed as early as Friday, Haaretz has learned.

Meanwhile, Hamas has agreed in principle to the Egyptian proposal for a cease-fire but is still demanding clarifications on a number of issues, senior officials for the group said in Cairo on Wednesday.

The head of the political-security bureau in the Defense Ministry, Amos Gilad, arrived in Cairo on Thursday to discuss the Egyptian proposal.

Prime Minister Ehud Olmert told Spanish Foreign Minister Miguel Moratinos on Wednesday that he wanted to bring the operation in the Gaza Strip to an end if Hamas agreed to the Egyptian proposal.

At the crux of the cooperation agreement between Israel and the U.S. is supervision to halt the smuggling of arms from Iran, through the Persian Gulf to Sudan and other countries, and finally to Hamas in the Gaza Strip.

The director general of the Foreign Ministry, Aharon Abramowitz, will meet with State Department officials Jeffrey Feltman and Daniel Hale in Washington today, as well as officials from the White House, Defense Department and U.S. intelligence agencies, in an effort to reach a written guarantee that the United States will act more extensively against the smuggling.

If an agreement is formulated, Foreign Minister Tzipi Livni will travel to Washington to sign the agreement.

Israel is asking for a number of guarantees from the Americans:

  • A U.S. declaration calling on the international community to deal with the smuggling of arms from Iran to terrorist groups in the Gaza Strip.

  • Intelligence cooperation between Israel and the U.S. for identifying the sources of weapons, with focus on the network linking Iran, the Persian Gulf and Sudan.

  • An international maritime effort along the smuggling routes to find ships carrying weapons to the Gaza Strip, possibly with the involvement of NATO.

  • An American and European commitment for the transfer of technologies to Egypt that will help it uncover tunnels.

  • Plans for the economic development of Rafah, with particular emphasis on the Bedouin to undercut the financial motivation for building and operating tunnels.

    Amos Gilad's trip to Cairo on Thursday for meetings with Egyptian intelligence chief Omar Suleiman was postponed twice this week, and his going now suggests some progress has taken place in talks between Egypt and Hamas, and that Gilad will be debriefed on developments on the cease-fire proposal agreement.

    Gilad also wants to confirm that Egypt is serious in its commitment to combat weapons smuggling along the Philadelphi Route into Gaza.

    A top Israeli diplomatic sources said he was told by a senior Egyptian official that "we understand the problem and promise that the matter of smuggling will end." The Egyptian added, "Now we have the legitimacy to fight it, in order to prevent continued IDF activity."

    Egyptian Foreign Minister Ahmet Aboul Gheit said Monday evening that Hamas had accepted the Egyptian draft, which calls for immediate end to aggression on Gaza, the opening of the border crossings and the withdrawal of Israeli forces inside the Strip.

    He said that Hamas representatives presented their stance to Egyptian intelligence officials, and that they in turn will relay the outcome of their talks to Israel.