On the second day of a ceasefire, rocket fire from Gaza has died down as the truce between Israel and Palestinian militants raises hopes for an end to five months of bloody destruction — and perhaps even a lasting peace.
 
Israel's prime minister, Ehud Olmert, said Monday he wants to revive peace talks, saying the Palestinians could get an independent state in the West Bank and Gaza by negotiating with Israel.

Israeli Prime Minister Ehud Olmert says Israel would 'leave large territories and dismantle settlements' in exchange for 'real peace.'
(Oded Balilty/Associated Press)

"We will agree to leave large territories and dismantle settlements that we established," Olmert said in what was billed as a major policy speech.

"We will be willing to do this in exchange for real peace.…"

He said that Palestinians are at a historic crossroads between violence and peace.

The CBC's Peter Armstrong, reporting from Jerusalem, said there was little new in Olmert's proposals except that they come soon after the start of an unexpected truce.

"A lot of these promises in terms of leaving the West Bank and dismantling the settlements are in fact things that Olmert had campaigned on," Armstrong said.

'Really in the last 36 hours you've seen a great change in tone and new sense of hope really developing here.'-CBC's Peter Armstrong, from Jerusalem

"But all of this is happening in a very new context and a very different sense of hope today.… Really in the last 36 hours you've seen a great change in tone and new sense of hope really developing here."

Palestinian President Mahmoud Abbas announced late Saturday that all Palestinian factions had agreed to stop firing rockets into Israel as long as the Israelis stopped all military operations in Gaza and withdrew their forces. The ceasefire took effect at 6 a.m. local time on Sunday.

Militants fired some rockets into Israel on Sunday. However, Palestinian security officers working under orders from Abbas fanned out across northern Gaza and by afternoon the salvos appeared to have stopped, the Associated Press reported.

The ceasefire was tested again on Monday.

Israeli troops in the West Bank shot dead at least one member of a militant group with ties to Gaza's Popular Resistance Committees, raising concern that there could be a violent response from the militants.

Palestinians in Gaza fired two rockets into Israel. There were no reports of injuries.

Palestinian Prime Minister Ismail Haniyeh, a leader of the militant Hamas faction, said he contacted the leaders of all Palestinian factions Sunday and they reassured him they were committed to the truce.

With files from the Associated Press