Gaza border deal in sight - Rice

US Secretary of State Condoleezza Rice extended her Middle East trip yesterday to try to broker a deal between Israel and the Palestinians on Gaza border crossings, saying a deal was in sight.

Ms Rice, urging an Israeli-Palestinian peace drive following Israel's Gaza pull-out, went to Jordan as scheduled to pay her respects after last week's hotel bombings but planned to return to Israel yesterday night instead of heading for South Korea.

Gaza's border crossing to Egypt is its main outlet to the rest of the world, but has been closed since Israel withdrew in September. Reopening it is widely seen as vital to boosting Gaza's economy and creating momentum for peacemaking.

"There is agreement in sight," Ms Rice told a news conference with Palestinian President Mahmoud Abbas in Ramallah.

Israel, which has kept control of Gaza's borders and air space since its withdrawal, has been under US pressure to reopen the Rafah border crossing to Egypt to trade and travel to help Gaza's mostly impoverished population.

Sporadic fighting despite a ceasefire has put a damper on diplomacy. In the latest flare-up, Israel shot dead a commander from the Hamas militant group in the West Bank and killed another gunman on the Gaza border. Militants vowed revenge.

Ms Rice's visit, her fourth to the region this year, has also been overshadowed by political upheaval in Israel that threatens to bring down Prime Minister Ariel Sharon's coalition government and force early elections.

But Ms Rice brought the two sides closer to a deal on reopening the Rafah border crossing as well as creating a land passage between Gaza and the West Bank.

"It is very important for ordinary Palestinians... that there be freedom of movement established between Gaza and the West Bank," she said.

Both sides have agreed to European Union observers at Rafah but differences appeared to centre on Israeli monitoring of the crossing.

Israel fears militants could take advantage of its lack of presence at the terminal to smuggle in weapons for armed groups in Gaza, and has pushed for a video link through which it could view Palestinians crossing the border. Palestinians oppose this.

Mr Abbas said an agreement was imminent but final details still had to be worked out.

A reopened border would boost his standing with Palestinians before January parliamentary elections in which Hamas is posing a strong challenge.

Ms Rice had been expected to press Mr Abbas to rein in militants from Hamas, which is dedicated to Israel's destruction.

"We talked about the need to condemn and fight terror," she said.