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Israeli Prime Minister Yitzhak Rabin agreed to allow Palestinians with jobs in Israel to re-enter the country in stages, ending a bitter standoff with the PLO. After meeting with PLO chairman Yasser Arafat, Rabin said he would gradually lift the closure of the West Bank and Gaza Strip and permit 15,000 Palestinian workers to return to their jobs next week. Arafat, in turn, set up a special military court to try suspected anti-Israel militants. He also arrested eight supporters of Islamic Jihad, the group responsible for a Jan. 22 bombing that killed 21 Israelis and prompted the border closing. "By the current low threshold of expectation, it''s progress almost a breakthrough," says TIME Jerusalem bureau chief Lisa Beyer. "The Israelis insist that Arafat at least make an effort (to round up terrorists), and this is his reward."