By Caroline Hawley BBC correspondent in Jerusalem

"A glimmer of hope" is how one Israeli official described his country's agreement to ease its crippling military restrictions on the Palestinians in exchange for a crackdown on militants.

He did not call it a breakthrough. Even among officials, scepticism over the deal runs deep - on both sides.

All the main Palestinian factions except Yasser Arafat's Fatah faction have already denounced the partial deal as a sell-out that will only prolong the Israeli occupation of the West Bank and Gaza.

The militant groups, Hamas, and Islamic Jihad have both said they won't call off their "resistance".

So what led to the security deal, after several months in which Israelis and Palestinians were unable to agree on anything?

Under pressure

One key factor is American pressure.

Palestinians say the success of the deal depends on Israel withdrawing

As the United States debates a possible attack on Iraq, it wants to calm the Israeli-Palestinian conflict which is now approaching the beginning of its third year.

That may well explain why the Israeli leader, Ariel Sharon, went along with the plan initiated by his defence minister, Binyamin Ben Eliezer, the chairman of the Labour party.

Mr Ben Eliezer has his own reasons for wanting a deal, as he heads towards elections for the leadership of the Labour party in November.

His ratings have slid dramatically over the past few months, with many Labour members questioning the role their party is playing in the Mr Sharon's coalition government.

As for the Palestinians, their bargaining position is weak, with their leader Yasser Arafat now fighting for his political survival as the Americans press for a change of Palestinian leadership.

"The Palestinian leadership can't afford to be held responsible for jeopardising any initiative, no matter how little it offers the Palestinians," says Ziad Abu Amr, a Gaza-based member of the Palestinian Legislative Council.

"The risk is that they'll be blamed when it fails."

Little faith

The Palestinian Authority has no illusions about the difficulties it will face in implementing a piecemeal deal that so many Palestinian factions oppose.

"The problematic aspect of this agreement is that it is partial," says Ghassan Khattib, the Palestinian minister of Labour.

"The future and the possibilities of success with this agreement depend on whether Israel is going to continue pulling out from the rest of the Palestinian territories and put an end to the closure and the assassination policy."

Any more Israeli killings of Palestinian militants or Palestinian suicide bombings could easily blow the latest agreement off course.

Few people on either side seem to believe an end to the bloodshed is really in sight.