The signing ceremony went ahead at the White House after the United States and Israel resolved their differences over the snag which threatened to hold up the signing.

The leaders arrived in Washington by helicopter from Wye River in Maryland, where the agreement was concluded earlier.

BBC Middle East Correspondent Jeremey Bowen gauges responses to the peace deal

The deal requires the Israelis to withdraw from a further 13% of the West Bank and to begin the release of Palestinian prisoners.

The Palestinians are to take action against militants, and to cancel the PLO charter's calls for the destruction of Israel.

President Clinton said the agreement was designed "to rebuild trust and renew hope for peace".

"Both parties must now build on that trust, and carry out their commitments," the president said.

Binyamin Netanyahu: Israel more secure

Israeli Prime Minister Binyamin Netanyahu said Israel and the entire region were more secure as a result of the deal.

He said negotiators had overcome tremendous challenges, which filled him with confidence that a final peace settlement could be met.

Palestinian leader Yasser Arafat said the deal showed the peace process was moving forward. He said the Palestinians would never turn away from peace and that the days of confrontation and violence were over.

Yasser Arafat: No return to violence

He said the interim agreement was an important step for the development of the Palestinian people.

There was praise from all the speakers for King Hussein of Jordan, who was present to facilitate the talks despite serious illness.

"It has been a shot in the arm for me, what you have accomplished today," the King said at the signing ceremony.

US Secretary of State Madeleine Albright described the signing as "a new chapter in the pursuit of a permanent peace in the Middle East".

Last-minute difficulties

An interim deal emerged on Friday morning, but soon ran into trouble over the release of Palestinian prisoners held by Israel, and an American in prison in the United States for spying for Israel.

Jonathan Pollard: Alleged to have spied for several countries

President Clinton has now agreed to review the case of Jonathan Pollard, the man serving a life sentence for espionage, but has not promised his release.

The peace process threatened to break down when the Israelis insisted on Mr Pollard's release as part of the peace deal.

Differences also remained on Friday morning over how many Palestinian prisoners the Israelis are to release as part of the deal.

All-night talks

An exhausted Bill Clinton returns to the White House

News of Friday's agreement came on the ninth morning of talks after an all-night session.

The interim deal is expected to end a 19-month log jam in Middle East peace negotiations. However, many tough decisions, such as over the future of Jerusalem, would still remain.

Israeli President Ezer Weizman, a frequent critic of the slow pace of peacemaking, said the accord was "good for Israel and the majority of the country".

But Israeli right-wingers blasted the deal as a "betrayal", saying it could lead to more bloodshed.

The BBC's Jeremy Bowen in Jerusalem: "For the right wing, any transfer of territory is a large transfer"

The BBC correspondent in Jerusalem, Jeremy Bowen, says the right wing has threatened to bring down the government and could impede the implementation of the agreement.