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Israel and the Palestinian Authority have reached an agreement on the creation of an overland connection between the Gaza Strip and the West Bank following the disengagement, Israel Radio reported on Tuesday.

Under the agreement, at a first stage Israeli security forces will escort convoys of Palestinian vehicles travelling between the two areas. In the future, Israel has proposed linking the two territories by railroad.

The overland link has been a bone of contention throughout the Israeli-Palestinian talks on the disengagement. For months, the Palestinians refused to discuss the withdrawal at all, wanting instead to focus on the "safe passage" between Gaza and the West Bank, which was promised them under the Oslo Accord but never implemented.

Israel and the PA have recently turned to the Quartet (U.S., Russia, the EU and the UN) and the World Bank requesting to review the proposals and assess their costs. James Wolfensohn, the Quartet's envoy on the disengagement, recently told Haaretz there has been significant progress in Israeli-Palestinian talks on economic and civil aspects of the disengagement.

The railroad would link the Erez industrial zone in the Gaza Strip to the Tarqumiyeh checkpoint near Hebron. The World Bank estimates that this would cost $175 million and take three years to build.

It therefore proposed that instead, a four-lane sunken highway be built in a five-meter-deep trench that would slice Israel in two. The trench would be surrounded by double fences to keep people from leaving it for Israeli territory, and Israeli traffic would cross it via overpasses. The bank believes that this would cost only $130 million to build and would also be cheaper to operate.