Israeli military chiefs have held a meeting with Palestinian security officials in an effort to avert a major military offensive in the Gaza Strip.
Israeli tanks have been gathering outside the Gaza Strip
The meeting came after Israel reversed a ban imposed on such contacts imposed after last week's suicide attack that killed six Israelis.
Palestinians reportedly presented plans to deploy security forces on the border to prevent violence against Israelis.
Israel is warning it will send troops into Gaza in force if attacks continue.
The Israeli security cabinet is believed to have approved the planned military offensive when it met on Wednesday.
The Palestinian delegation for Wednesday night's meeting was led by Gaza security services chief Musa Arafat, while Israel was represented by and Brig-Gen Aviv Kokhavi, the commander of the Israeli army's Gaza Division, and Col Yoav Mordekhay, head of district co-ordination and co-operation office.
The Palestinian leader, Mahmoud Abbas, has been trying to persuade Gaza militants to accept a truce since he was elected to the presidency of the Palestinian Authority on 9 January.
A spokesman for the Islamic Jihad militant group, Sheikh Nafez Azzam, told the BBC that there was optimism about the continuing talks - but added there had been no agreement on a ceasefire.
Militants insist they will only call off attacks if Israel does the same.
But violence continued on Thursday. Two Palestinian teenagers were shot dead by Israeli forces, one in the West Bank town of Tubas, near Jenin and the other in the Rafah refugee camp in Gaza.
Salah Ikhab what shot as he was play with a toy rifle, after soldiers apparently mistook him for a gunman. The circumstances of the death of the second child, Salah Abu Alaes, are not known.
Abbas is under huge pressure to bring about a ceasefire
Israel says it will reopen Gaza's Rafah border crossing with Egypt on Friday, allowing thousands of Palestinians trapped in Egypt since 12 December to return home in what was described as a "goodwill gesture".
The border has been closed since an attack by Palestinian militants on a Rafah army post in which five Israeli soldiers died.
Israel has occupied the Gaza Strip and the West Bank - home to about four million Palestinians - since 1967.
Call for calm
The Palestinian security commander said on Wednesday that security units would fan out near Gaza's borders over the next two days to enforce Mr Abbas' call for calm.
"We want to make sure the Israelis know where our men are, so they don't get shot by accident," a Palestinian security official said after the bilateral security talks.
Israeli officials are quoted as saying up to 1,000 Palestinian officers are to be deployed, perhaps as early as Thursday, and that Israel has accepted the plan.
"We are waiting to see how effective they will be," the official said.
The BBC's Barbara Plett in Jerusalem says Israel's decision to re-open links is apparently meant to give Mr Abbas more of a chance to coax the militants into a deal.