Israel has agreed in talks to cede control of two West Bank towns - Jericho and Tulkarm - to Palestinian forces in the coming days.
Palestinian police have been training to take over in Jericho
Israel's army will draw back from the town of Jericho first, Palestinian leader Mahmoud Abbas said.
However, a meeting between him and Israeli Defence Minister Shaul Mofaz ended without agreement on when and how far the Israeli forces will withdraw.
The talks form part of an effort to revive a stalled peace process.
Contacts between Israeli and Palestinian officials were frozen after a suicide bomb attack by Palestinian militants in Tel Aviv killed four Israelis on 25 February.
The meeting between Mr Abbas and Mr Mofaz, held at the Gaza Strip's Erez Checkpoint, is the most high-profile contact between the two sides since the Sharm al-Sheikh summit in Egypt last month.
At the February summit, the two sides tentatively agreed that Israel will give Palestinian police control over five West Bank towns - Tulkarm, Jericho, Qalqilya, Ramallah and Bethlehem - to test their ability to curb militants.
Israeli forces have kept a tight grip on the towns since 2002 after a spate of suicide bombings. Correspondents say the checkpoints have crippled Palestinian social and economic life.
Mr Mofaz said "we will apparently transfer control over two ... towns, after a meeting of security officers".
Mr Abbas earlier accused Israel of stalling on peace promises
"We are talking about Tulkarm and Jericho," he said.
Mr Abbas said all Israeli checkpoints in their vicinity should also be vacated.
"We are not talking about towns, but also surrounding areas," he said.
He said Jericho, built near an isolated oasis some distance away from Israel, would be the first to be vacated.
The town was reportedly chosen after doubts over the immediate handover of Tulkarm, which lies close to Israeli population centres and is seen as a greater security threat.
Earlier on Tuesday, Mr Abbas accused Israel of stalling on agreements to hand over the West Bank towns and release Palestinians imprisoned on suspicion of militancy.
Israeli forces have ringed the West Bank in response to a wave of suicide bombings since 2002
Knesset bomb plot
In a separate development, Israeli police on Monday announced the arrest of an Arab Israeli man on suspicion of planning an attack on the Israeli parliament.
A police spokesman said the 24-year-old suspect came from the northern Galilee region and was detained several weeks ago, but a court order prevented the disclosure of his arrest until Monday.
The police said an investigation had established that the man - who has yet to be formally charged - had planned a range of attacks on Israeli targets and that he had been recruited by an unnamed organisation.
But the man's lawyer denies all this.
Israeli media have reported that the suspect tried to obtain work at a building site near the parliament, or Knesset, which Reuven Rivlin, the parliamentary speaker, has described as a dream target for any terror organisation.