Israeli officials have told the BBC Yasser Arafat will be allowed to return to the West Bank if, as expected, he goes abroad for medical treatment.
Media have not been allowed in to see Arafat
Doctors are assessing whether the ailing Palestinian leader, 75, should be moved from his HQ in Ramallah to a hospital in Jordan or possibly France.
Israel has kept Mr Arafat, who is said to have a blood disorder, in his compound for nearly three years.
His wife has returned to the West Bank from Paris to be by his side.
Suha Arafat arrived at the compound after crossing the Allenby bridge from Jordan to see her husband for the first time in four years.
Her arrival came as Palestinian officials released a photo of her husband sitting in the company of doctors.
Dressed in light blue pyjamas and a hat, Mr Arafat is shown wan and pale but smiling in the picture, said to have been taken at 1300 local time (1100 GMT).
The BBC's Barbara Plett says Israel, which has long held Mr Arafat responsible for militant violence, is probably keen not to be seen as responsible in any way for the death of the Palestinian leader.
The Israeli sources who spoke to the BBC said they were treating the matter as a humanitarian issue.
Palestinian official Musa Arafat said earlier the final decision on whether the leader would be moved rested with the doctors.
A doctor treating Mr Arafat told AFP news agency on condition of anonymity that he was suffering from a blood disorder and more tests were needed to determine the cause.
"His blood cells, which should normally destroy microbes, are currently destroying blood platelets," the doctor said.
Reports suggest no final decision will be taken before the arrival of four Egyptian doctors who flew out of Cairo during the afternoon. Tunisian, Jordanian and Palestinian doctors are all already at the compound.
Palestinian security forces have been put on high alert across the territories and the Israeli army has made contingency plans, fearing an outbreak of unrest in the event of Mr Arafat's death.
Palestinian legislator Hanan Ashrawi said she had heard that the leader was out of bed on Thursday morning to say prayers and take a breakfast of cornflakes and milk.
"Yesterday he was unable to keep anything down," she noted.
Ms Ashrawi told the BBC she thought it was best for Mr Arafat him to get treatment away from the "unhealthy surroundings" of the half-ruined compound.
There is a huge sense among Palestinians that this is a moment of crisis, the BBC's Alan Johnston reports from Gaza City, where he spoke to people in Palestine Square.
He says there is little talk now of Mr Arafat's failings as an administrator and ordinary Palestinians are very much hoping that the old man, as they often call him, will pull through.
In Ramallah, shoe merchant Jawad Juda, 50, told Reuters news agency that Mr Arafat was "the head of the whole Palestinian household".
"I'm afraid if he dies, there will be no authority - it will be a catastrophe for our people," he added.
Having led the Palestinian struggle for statehood for nearly 40 years, Mr Arafat is seen by Palestinians as an irreplaceable figurehead, the BBC's Lucy Williamson reports from Jerusalem.
As perhaps the only person capable of uniting the many different Palestinian groups, he has no obvious successor, our correspondent adds.