RAMALLAH, West Bank - The Palestinian leadership banned civilians today from carrying weapons, its latest step aimed at reining in militant violence, as the Palestinian leader said he was awaiting Israel's response on a proposal for a mutual cease-fire declaration.

If enforced, the ban on weapons would be a strong move against militant groups, whose gunmen often openly brandish their automatic weapons in the streets of Gaza and the West Bank - reflecting the lack of control by the Palestinian security forces.

In the next step to impose order, the Palestinian security forces were preparing to move into the volatile southern Gaza Strip to prevent rocket and other attacks into Israel, extending their control from the northern part of Gaza, where they deployed earlier.

Palestinian leader Mahmoud Abbas won praise from Israeli Prime Minister Ariel Sharon and visiting U.S. envoy William Burns for his efforts to halt violence, reflecting the new atmosphere of optimism in the peace process.

In a test for Abbas's ruling Fatah movement, the first municipal elections in Gaza's history was being held today in 10 districts in the coastal strip. The militant groups Hamas and Islamic Jihad were expected to pose a stiff challenge to Fatah in the races.

Abbas has won assurances from armed groups that they will halt attacks on Israel, provided Israel stops military operations, including arrest raids and targeted killings of Palestinian fugitives.

In meetings Wednesday, Palestinian negotiators proposed that both sides issue formal cease-fire declaration. Israeli officials have said in the past they are not interested in such a formal declaration, but Palestinian Cabinet minister Saeb Erekat said the Israelis promised to consider the step.

Palestinian Prime Minister Ahmed Qureia issued the order banning civilians from carrying weapons in the Palestinian territories, Erekat told The Associated Press.

Abbas and Qureia have also decided to name Nasser Yousef as the new Palestinian interior minister, a post in charge of the security forces, said a senior Palestinian official, speaking on condition of anonymity.

Yousef was in charge of cracking down on militants in the 1990s, and his appointment would send a clear signal that the Palestinian leadership intends to act against militants.

In central and southern Gaza, Palestinian police were to have taken up positions today. However, deployment was delayed because of technical difficulties, and will begin Friday, Palestinian commanders said.

Optimism was running relatively high after Israeli and Palestinian officials looked toward the possibility of a Sharon-Abbas summit in the next two weeks.

Sharon said he would not stop all Israeli military operations for the time being, but would make gestures toward the new Palestinian leader. He did not elaborate.

Mohammed Dahlan, a senior Abbas adviser, said in an interview with The Associated Press that during Wednesday's meetings, Israel agreed in principle to stop pursuing militants and halt the targeted killings.

Israel also promised in the meeting to release hundreds of prisoners - a key Palestinian demand - and that the number to be freed is expected to be about 900, a senior official said on condition of anonymity.

In the Gaza Strip, meanwhile, Palestinians in 10 districts were choosing among 414 candidates for 118 municipal council seats.

The Gaza vote follows a Dec. 23 election in 26 West Bank towns and villages, and a Jan. 9 presidential race in which Abbas was chosen to succeed Yasser Arafat, who died Nov. 11.

Hamas made a strong showing in the West Bank race - taking over many councils from Fatah - and was also expected to do well in Gaza, where the militant group is popular. Hamas has recently shifted its focus toward politics and agreed to halt its attacks, at least temporarily.

Burns, the U.S. envoy, held separate talks today with Abbas and Qureia. Burns is to meet Sharon later today.