JERUSALEM (Reuters) - Israeli leaders approved on Thursday a troop pullback from West Bank cities and a plan to release Palestinian prisoners, measures crucial to the success of an Israeli summit with the Palestinians in Egypt next week.

 Israel and the Palestinians said they hoped to declare a formal halt to violence at the talks in the Red Sea resort of Sharm el-Sheikh next Tuesday that will mark a dramatic return to peacemaking after more than four years of bloodshed.
 

As part of a confidence-building package to be presented at the summit, Israel will carry out a phased military pullback from positions around five Palestinian cities and free hundreds of prisoners, said a cabinet minister who declined to be named.
 

Troops will move away from the West Bank city of Jericho first and then withdraw from areas around Tulkarm, Bethlehem, Qalqilya and Ramallah, the seat of the Palestinian government.
 

Prime Minister Ariel Sharon (news - web sites) and top cabinet ministers approved the steps at a meeting in Tel Aviv that was to be followed by talks later in the day between senior Israeli and Palestinian officials.
 

Palestinians have sought a wider prisoner release, an issue key to attempts by new President Mahmoud Abbas to consolidate power following the death of Yasser Arafat (news - web sites). The cabinet minister said Palestinians jailed for deadly attacks would not go free.
 

In addition, a joint Israeli-Palestinian committee will be formed to finalize a roster of Palestinian militants who will be struck off Israel's most-wanted list in return for a halt of attacks against Israelis.
 

Israel will also open all of the Gaza Strip (news - web sites) border crossings it closed in response to strikes by militants.