JERUSALEM (AP) — Israel offered its first indication it was reassessing relations with the Palestinians after Yasser Arafat’s death yesterday, suggesting it might coordinate a planned withdrawal from the Gaza Strip if the Palestinian Authority cracks down on militant groups.

Palestinian leaders reacted cautiously to remarks by Foreign Minister Silvan Shalom and argued that Israel should “unconditionally” reopen peace talks under the U.S.-backed “road map” plan.

Prime Minister Ariel Sharon had previously refused to negotiate the “unilateral disengagement plan” with Arafat, insisting that he was responsible for four years of fighting. Arafat’s death in a French hospital last week has opened up what many leaders believe is a crucial opportunity to revive the Middle East peace process by clearing the way for a more moderate leadership.

If leaders emerge who are willing to stem the violence, Israel is prepared to coordinate the plan to move troops and 8,800 Jewish settlers out of the Gaza Strip and four West Bank settlements, Israeli officials said yesterday. Such coordination is considered critical to avoid a chaotic transition.

“Israel has every interest that Gaza will be ruled in a responsible manner when redeployment takes place,” Shalom told a conference of North American Jews in Cleveland. “If the new leadership on the Palestinian side acts to combat terror, then we will be able to consider coordinating aspects of the ‘day after’ with them.”

Foreign Ministry spokesman Mark Regev confirmed Shalom’s comments constituted a “new policy.”

Israel’s security establishment is currently examining ways to work with Palestinian security forces to hand them control of the Gaza Strip when Israel withdraws, senior Israeli officials said yesterday on condition of anonymity. The recommendations will be discussed with Sharon in an upcoming meeting of senior officials on the matter, the officials said.

Israeli and Palestinian officials alike have expressed fears that an evacuation from Gaza that is not coordinated would bring chaos to the Gaza Strip, where militant groups have been vying for control in recent months.

Shots were fired in Gaza on Sunday as Mahmoud Abbas, a leading candidate in Palestinian elections on Jan. 9, attended a gathering of people mourning Arafat. Two security guards were killed, and fears were raised that the violence could spiral.

A cease-fire by Palestinian militants is a central Israeli condition for the coordination of the Gaza pullout plan, a senior Israeli official said on condition of anonymity.

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