Yehiyeh has held a series of contacts with Israeli security officials over the past few weeks with the aim of reducing tensions. However, radical Palestinian groups have refused to endorse the idea of a ceasefire, particularly as Israel has continued to launch assassination attacks against Palestinians. Israel said on 5 September that it had foiled a major car bomb attack, involving 600 kilos of explosives.

The EU, now under the presidency of Denmark, in early September presented fresh proposals for settling the Palestinian-Israeli conflict. Palestinian leader Yasser Arafat said on 4 September that he accepted the ideas in principle. He was speaking after a meeting with visiting Danish Foreign Affairs Minister Per Stig Moeller. The initiative is said to entail the establishment of a Palestinian state initially without recognised borders, to be followed by a fully fledged state within three years.

Moeller's talks with Israeli officials were marred by a dispute over Palestinian elections. The Danish minister said he supported the Palestinian plan for elections to be held in early January. However, Israeli Defence Minister Binyamin Ben Eliezer has said Israel opposes the plan because it will result in Arafat's re-election and a parliamentary majority for the Hamas movement.