By James Reynolds BBC correspondent in Jerusalem

Israel's Prime Minister, Ariel Sharon, says that he sees the possibility for a political agreement with the Palestinians.

Sharon wants the public to see that he has more in mind than military action

"I see for the first time the possibility of an agreement with the Palestinians," he said in an interview with Israeli television.

"It won't be easy, but the possibility exists."

What the terms of this agreement may be, he did not make clear.

But he added that he could only negotiate with Palestinians who have concluded that terror achieves nothing.

Political edge

Mr Sharon's comments come after a month in which no Israelis have been killed inside Israel by Palestinians.

He is keen to show that this is because his tactics are working and there is a political edge to his remarks as well.

Initial manoeuvrings have begun for the next Israeli general election, expected next year, and Mr Sharon's rivals, including the former Prime Minister, Binyamin Netanyahu, have started to stake out their positions.

Mr Sharon wants to make sure that the public here understands he has more in mind than endless military action, and that he has an end game which does involve some sort of political agreement.