Powell and Sharon held 'frank and useful' discussions
US Secretary Colin Powell has urged both Israelis and Palestinians to take "practical steps on the ground" to implement the latest peace plan for the Middle East.
Speaking after talks in Jerusalem with Israeli Prime Minister Ariel Sharon, Mr Powell said a "historic opportunity" should be seized.
He also echoed Israel's call for Palestinian militant groups to be disarmed.
Mr Powell is pressing this point in talks now taking place in the West Bank with the Palestinian Prime Minister Mahmoud Abbas, also known as Abu Mazen.
The secretary of state is in the region to promote the international peace plan - the "roadmap" - which was drafted by the US, Russia, the European Union and the United Nations.
It outlines a process that begins with a cessation of Palestinian attacks and Israel's withdrawal from Palestinian territories - and ends with the establishment of a Palestinian state by 2005.
The plan also involves a freeze on Israeli settlement growth and the removal of recently established settler outposts.
Mr Powell said his talks with Mr Sharon had been "frank, productive and useful".
He called on the Israelis to take "concrete measures" to ease the plight of Palestinians.
Mr Sharon, for his part, said Israel was willing to make "painful concessions" for a genuine, durable peace but will not compromise its security.
He made it clear that the Palestinians could expect nothing more than modest "humanitarian" gestures until Abu Mazen's government cracks down on militants.
The BBC's Jon Leyne, who is travelling with the secretary of state, says the crucial issue of Jewish settlements seems to have been postponed for discussions during Mr Sharon's visit to the White House in a week's time.
Overnight, the Israeli army lifted its temporary ban on Palestinians travelling to work in Israel.
ROADMAP MAIN POINTS
Phase 1 (to May 2003): End of terrorism, normalisation of Palestinian life and Palestinian political reform; Israeli withdrawal and end of settlement activity; Palestinian elections
Phase 2: (June-Dec 2003) Creation of an independent Palestinian state; international conference and international monitoring of compliance with roadmap
Phase 3 (2004-2005): Second international conference; permanent status agreement and end of conflict; agreement on final borders, Jerusalem, refugees and settlements; Arab states to agree to peace deals with Israel
The ban was put in place during a security alert for a Jewish holiday that ended last week.
Israeli security sources also said on Sunday that several hundred detained Palestinians would be released over the coming days.
Under Israeli regulations governing administrative detention suspected militants can be held for up to six months without charge.
Mr Powell welcomed the recent Palestinian reforms that brought Abu Mazen into office.
However he called on him to do more to combat militant groups.
"We must also see rapid, decisive action by the Palestinians to disarm and dismantle the terrorist infrastructure," Mr Powell said.
"Without such action, our best efforts will fail," he added.
The Americans are offering to help the new leadership rein in militants responsible for attacking Israel.
Powell is pressing for an end to Israeli restrictions on Palestinians
In the latest violence, an Israeli man was shot dead when gunmen opened fire on his car near a Jewish settlement in the West Bank on Sunday.
The venue for the meeting between Mr Powell and Abu Mazen has been switched to the West Bank city of Jericho.
This was done on the insistence of the Americans who wanted to avoid any danger of Mr Powell bumping into Yasser Arafat, in line with the Bush administration's policy of sidelining the Palestinian leader.
Mr Arafat has been restricted by the Israelis to his Ramallah headquarters for more than a year.