The deal was struck on Tuesday between Mussa Arafat, the head of Palestinian national security in Gaza, and Avi Kochavi, who commands Israeli troops in territory.
During talks at the Erez checkpoint between Gaza and Israel, the two discussed a Palestinian deployment of forces in the flashpoint Khan Yunis and Rafah areas from where militants frequently launch rockets into Israel.
No Israeli official was immediately available to comment on the outcome of the talks, which took place five days after the successful deployment of around 2,500 Palestinian security forces in northern Gaza.
That deployment has been accompanied by a marked lull in violence in Gaza.
Israel also agreed on an unspecified number of Palestinian workers being allowed to cross Erez to work in Israel.
But earlier Palestinian Prime Minister Ahmed Qorei accused Israel of bad faith with its resumed construction of the West Bank separation barrier inside Palestinian territory.
“We are making 100 percent efforts to bring about a ceasefire but Israel is sending us an ugly message by working on the wall,” Mr Qorei told reporters, saying it would lead to the “confiscation of a large amount of land”.
He said the Palestinians would make US envoy William Burns “aware of the situation on the ground” when he arrived for a visit later this week.
Witnesses said several hundred Palestinians and foreign activists tried to stop work on the barrier in the village of Iskaka near the Jewish settlement of Ariel, where bulldozers resumed work on Monday after a seven-month break.
Work on the section was halted last June by order of Israel’s supreme court, but recommenced Monday after being sanctioned by attorney general Menachem Mazuz.
Construction of the Ariel section is particularly contentious as it is situated about 20 kilometres inside the West Bank.
Israel insists the barrier is crucial to prevent infiltrations by West Bank militants and suicide bombers, but Palestinians see it as a land grab aimed at foiling the creation of a viable Palestinian state.