Wolfensohn told Congressional leaders last week that he is coordinating projects with the Palestinian Authority (PA) in an effort to build up the economy. Wolfensohn is the envoy representing the Quartet comprised of the United States, the European Union, Russia and the United Nations. With $3 billion in international infrastructure investment to create new jobs, he has been able to win cooperation from Arabs.

PA chairman Abu Mazen (Mahmoud Abbas) promised Wolfensohn on Saturday that the PA would ensure quiet during the expulsion of Jewish residents planned for mid-August and the subsequent IDF withdrawal.

Abu Mazen told Wolfensohn, "We will fully cooperate with him in order [for him] to succeed [in] his mission and goals." Although the PA and Israel have not agreed on coordination issues, Wolfensohn said he is optimistic the two sides will reach an understanding.

"I do honestly believe... that the last two months gives us an increasing atmosphere of hope and practicality. You're getting a better exchange of information, you're getting technical committees working together, you're having open discussions on the tough issues," said Wolfensohn.

As terrorists attacked Gush Katif and Negev communities with seven mortar shells on Saturday, the PA leader met in Gaza with Islamic Jihad and Hamas officials, who agreed to refrain from violence during the expulsion. Terrorists also fired on several IDF posts. There were no reported injuries in the attacks.

Hamas leader Mahmoud Zahar said, "Hamas will join the Palestinian people in celebrating the Israeli withdrawal to emphasize that the resistance is responsible for the liberation of these territories."