<B>Gaza Strip </B>

Israel will withdraw from the Gaza Strip, including all the existing Israeli settlements, and will redeploy in territory outside of the Strip. The withdrawal will exclude a military presence in the area along the border area between the Gaza Strip and Egypt called ?The Philadelphia Corridor?.

Israel retains the right to expand the area in which military operations are conducted. Israel will exclusively control the airspace of the Gaza Strip, and will continue to carry out military operations in the sea.

The Gaza Strip will be demilitarised of weapons whose existence are not in accordance with existing agreements between the two sides.

Israel will consider maintaining the status quo of the Erez Industrial Zone, on condition of suitable security arrangements and a clear recognition by the international community that the continuing operation of the industrial zone will not be viewed as a continuation of Israeli control of the area.

Alternatively, the industrial zone will be handed over to the responsibility of agreed upon Palestinian or international authorities. Israel will consider, together with Egypt, the possibility of establishing a joint industrial zone on the border of the Gaza Strip, Egypt and Israel

<B>West Bank </B>

Israel will evacuate the settlements of Ganim, Kadim, Homesh and Sanur, and all permanent military installations in this area.

The process will allow for a continuous Palestinian territory in the area of the northern West Bank. Israel will continue building the West Bank barrier.

Israeli military activity will continue in the areas of the West Bank where Israel retains a presence. If circumstances allow, Israel will consider reducing its activity in Palestinian cities. Israel will work towards reducing the number of checkpoints in the West Bank as a whole.

<B>Israeli settlements </B>

Israel will aim to maintain the assets of Israeli settlements. Israel suggests the establishment of an international body, which will be agreed upon between Israel and the United States, that will take possession of the settlements. Israel retains the right to ask for compensation to the value of all the economic assets that remain in areas from which it withdraws. The infrastructures of water, electricity, waste management and communications serving the settlements and the Palestinians will remain in place.

<B>Other matters </B>

General arrangements currently in place between Israel and the Palestinians will remain in effect, including the entrance of Palestinian workers into Israel and the flow of goods. In the long term, Israel aims to reduce the number of Palestinian workers entering Israel. Existing arrangements governing international crossings between the Gaza Strip and Egypt, and the West Bank and Jordan, will remain in place.

Israel insists there will be no foreign military presence in the Gaza Strip and/or the West Bank, without co-ordination and without Israeli agreement. Israel retains the basic right to self-defence, including pre-emptive steps and response, with the use of force, against threats emanating from the Gaza Strip and evacuated areas of the West Bank. The withdrawal is planned to be completed by the end of 2005.