Israeli Foreign Minister Shimon Peres met Palestinian chief negotiator Saeb Erekat on Saturday night for discussions on how to ease hardships for Palestinians under curfew across the West Bank.

In one of the Palestinian attacks, militants bombed a bus and then opened fire

The meeting was postponed twice after Palestinian militants killed 12 Israelis in attacks outside a Jewish settlement on the West Bank and in the Israeli city of Tel Aviv.

The talks came as Israel faced mounting criticism over plans to deport relatives of suicide bombers who support such attacks.

Correspondents say there are few details of what came out of the talks on Saturday night.

Economic hardship

The discussions, which were held at an undisclosed location, were aimed at alleviating economic hardship for nearly 700,000 Palestinians affected by Israeli curfews and roadblocks.

Last month, Israel took over seven out of eight major West Bank cities after Palestinian militants killed 26 people in two suicide bombings in Jerusalem.

Israeli minister Danny Naveh, who also took part in the talks, said Israel had a "clear interest" not to stoke Palestinian anger through economic hardship.

Mr Naveh said financial aid should only be given to the Palestinians if there were guarantees it would not be used to fund militant groups.

Israeli officials said the discussions would not broach political issues, after peace talks were suspended following the outbreak of the Palestinian intifada (uprising) in September 2000.

Plan condemned

Earlier, the United Nations added its voice to the condemnation of Israel's plans to expel close relatives of Palestinian suicide bombers from the West Bank.

UN Secretary General Kofi Annan said he was "disturbed" by the measures, which amounted to the "collective punishment" of the Palestinian people.

The United States - Israel's staunchest ally - has also criticised the expulsion proposal, as have human rights groups.

It follows the arrests on Friday of 21 Palestinian men related to two militants who carried out a double suicide boming in Tel Aviv on Wednesday.

Israel is said to be considering exiling the men to Gaza.

It would be the first time Israel has taken such a step since the uprising began.

Israeli Foreign Ministry spokesman Daniel Taub said expulsion could be one way of denying the bombers a "supportive environment".

But the Palestinian Authority warned that the move would only lead to "more trouble", while the militant Islamic group Hamas threatened to launch a new wave of suicide attacks if any expulsions were carried out.