TEL AVIV Ñ Israeli Prime Minister Ariel Sharon has agreed to the stationing of CIA agents to revive the U.S.-sponsored ceasefire in the West Bank and Gaza Strip.

After several days of silence, Sharon has acknowledged that he does not oppose international observers as long as they come from the United States. The prime minister told the Knesset Foreign Affairs and Defense Committee on Monday that this would mean the stationing of additional CIA personnel in the area.

Israeli officials said Sharon has agreed to a 10-member CIA contingency. The prime minister has not confirmed this.

"There are already CIA men going around the area today and I won't object if more come here," Sharon said. "But this has to be discussed with the Americans to coordinate the matter."

Officials said the proposal for the CIA to serve as international observers came from Egypt. The Bush administration is studying the proposal.

"We will be describing over the period ahead some of our own thinking, which is still evolving," said Daniel Kurtzer, the new U.S. ambassador to Israel. "We expect that Israel and the Palestinian Authority will also have their own views and we will see whether we can reach some understanding on that."

On late Monday, Israeli authorities said they captured or killed a suicide squad sponsored by the Iranian-backed Islamic Jihad. The squad had planned to bomb the crowded downtown in Haifa over the weekend.

Israeli sources said two of the three members of the Palestinian squad were captured. A third was killed.

On Tuesday, Israeli authorities warned of a Palestinian attack on Jewish settlement leaders. This, in the wake of the killing of three Palestinians near Hebron in a shooting attributed to Israelis.

At the same time, the Palestinian Authority handed over the body of a 18-year-old Jew to Israeli authorities near Ramallah. Earlier, a Palestinian youngster was killed in a shootout with Israeli forces in the Gaza Strip.

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