A plan to hand the West Bank town of Jericho from Israeli to Palestinian control on Tuesday has been delayed.
Israel agreed to pull out of the town as part of a series of confidence-building measures after the Sharm al-Sheikh summit in Egypt.
The move, however, has been held up amid differences over the scope of the withdrawal and security arrangements.
Palestinians hope Jericho will be the first in a series of Israeli pull-backs from other West Bank towns.
Israeli and Palestinian security officials met on Monday but failed to break the deadlock over the transfer of Jericho.
The Palestinians want Israel to withdraw from Jericho, remove a military checkpoint from the entrance to the town and hand over the adjacent village of al-Awja.
Previously when Israel has withdrawn from Palestinian population centres, it has left them ringed them with checkpoints, severely restricting movement.
Palestinian negotiator Saeb Erekat told the Associated Press news agency Israeli and Palestinian commanders would hold more talks on Tuesday.
Israel reportedly agreed to withdraw from Jericho and four other West Bank towns following the Sharm al-Sheikh summit between Israeli Prime Minister Ariel Sharon and Palestinian leader Mahmoud Abbas last week.
There has been little violence in Jericho since the Palestinian uprising (intifada) began over four years ago, and correspondents say a pull-out would be of mainly symbolic value.
Until 2000 the town relied largely on tourism and the only casino in either Israel or the Palestinian territories. Mr Erekat - himself a Jericho resident - has said he wants an Israeli ban lifted that would allow their citizens back into the town, which might revive it economically.
A pull-out from Jericho is expected to precede the transfer of Tulkarm, Qalqilya, Bethlehem and Ramallah, which were reoccupied by Israeli troops following a spate of suicide bombings in 2002.