The agreement was struck at a meeting between Palestinian Minister of Civilian Affairs Mohammed Dahlan and Israeli Defense Minister Shaul Mofaz late Friday in central Israel, Israel Radio said.
The two officials discussed opening crossing points between Israel, Gaza Strip and the West Bank to allow freer Palestinian movement, the radio said, revealing no details.
Israel has proposed to build a railway linking the West Bank and Gaza Strip that the Palestinians consider as one geographical unit and a basis for an independent and viable state.
It was not clear whether the railway issue was touched upon at the meeting.
Mofaz and Dahlan also discussed security coordination between the two sides during the planned Israeli withdrawal from all Gaza and northern West Bank in mid-August, the radio added.