Israel, Palestinians agree on Gaza border deal

It took all-night negotiations and a strong diplomatic shove from US Secretary of State Condoleezza Rice to get a deal whose basic elements had been in the works for weeks.

"I have to say as a football fan, sometimes the last yard is the hardest, and I think we experienced that today," Rice told a news conference.

Rice oversaw the marathon negotiations in a Jerusalem hotel, huddling alternately with Israeli and Palestinian negotiators in her suite. She had postponed a planned departure for Asia by a day to shepherd the deal to a conclusion.

On Tuesday morning, she met with Israeli Defense Minister Shaul Mofaz to finalize the details.

Rice praised the deal as a "big step forward" in Israeli-Palestinian relations, bruised by nearly five years of bloody fighting.

"This agreement is intended to give Palestinian people the freedom to move, to trade, to live ordinary lives," she said.

A deal to free up Palestinian movement while satisfying Israeli concerns about terrorism is a statement of progress beyond the technical issues at hand.

The agreement gives the Palestinians control over a border for the first time and provides a much-needed boost to the shattered Gaza economy. The deal also strengthens Palestinian leader Mahmoud Abbas ahead of Jan. 25 parliament elections and could help him fend off a strong challenge by the Islamic militant group Hamas.

Rice and international Mideast envoy James Wolfensohn badly wanted Israel and the Palestinian leadership to use Israel's unilateral withdrawal from the Gaza Strip last summer as traction for tougher peace negotiations down the road.

Cooperation flagged in recent weeks, and Rice's two days of meetings in Jerusalem and the West Bank were meant to push the two sides to settle nitty-gritty disputes over Palestinian movement in and out of the territory they now control. "Underneath what may seem like very small details there are hard issues," Rice told reporters.

She said she only got about two hours of sleep.

Wolfensohn said the deal cleared the way for the international community to assist the Palestinians and help revive Gaza's economy. Donor countries have pledged hundreds of millions of dollars, but the money was held up by the lack of a border deal.