Trucks could be seen towing away concrete blocks and the cameras also showed Israeli and Palestinian security officials consulting maps to thrash out the final details of the pull-out from the towns of Beit Hanun and Beit Lahia, which border Israel.

However, tanks and troops had not yet started pulling back from Beit Hanun and Beit Lahia where Palestinian police will take over for the Israeli troops in policing Palestinian militant groups.

The withdrawal is being touted as a first step in carrying out the US-backed Middle East peace roadmap, which aims to end months of violence and establish a Palestinian state by the end of 2005.

The Israeli army moved into Beit Hanun and Beit Lahia two months ago in a bid to dismantle the infrastructure of militants groups and prevent them from launching rocket attacks on nearby Israeli communities.

"Israeli troops will start withdrawing at midnight and the Palestinian police will start taking its positions at 8:00 am (0500 GMT) tomorrow," a senior Palestinian security official said.

Cracks were already emerging in the agreement only hours after it was reached, as Palestinian security sources complained of "violations of the deal signed on Sunday".

The sources said the army had erected an observation tower along the main north-south road near the Jewish settlement of Netzarim, just south of Gaza City, and another near a Bedouin village close to Beit Lahia.

WAR.WIRE