JERUSALEM, Sept. 14 (JTA) – U.S. Secretary of State Madeleine Albright had some sharp words for Israel and the Palestinians during her visit to the region. In unusually blunt language for a diplomat, she warned the two sides that she would all but wash her hands of the peace process if they were not willing to take some difficult steps on their own. And within days after she departed, there were some signs that Israel and the Palestinians might step back from the brink. Prime Minister Benjamin Netanyahu’s spokesman, David Bar-Illan said Sunday that there were some “positive” signs the Palestinians were beginning to fight the terrorist infrastructure. Bar-Illan said that if the Palestinian Authority took serious steps to combat terrorism, Israel would be willing to make gestures of its own. Within hours after he spoke, an Israeli army spokeswoman said Israel would lift an internal closure on Palestinian towns in the West Bank. Israel imposed the closure after a Sept. 4 triple suicide bombing in Jerusalem that killed five Israelis. There were also reports Sunday that Israel would hand over to the Palestinian Authority half of the tax revenues it was withholding after a July 30 double suicide bombing in Jerusalem. Also Sunday, an Interior Ministry committee cleared the way to start a controversial Jewish housing project in eastern Jerusalem. But Bar-Illan said the prime minister might still block the project in Ras al-Amud. He spoke after the Jerusalem district planning and building appeals board rejected an appeal filed by two members of the Jerusalem City Council against the project, which is planned by Miami-based developer Irving Moskowitz. In July, Netanyahu criticized the Jerusalem Municipality for granting Moskowitz permits to build 70 housing units for Jews in Ras al-Amud. Two members of the Jerusalem City Council from the Meretz Party later appealed the municipality’s decision. But on Sunday, the planning board’s Appeal Committee unanimously rejected the appeals. One of the petitioners, Ornan Yekutieli, said he intended to appeal to the district court. The Appeal Committee’s decision came three days after Albright called on Israel to take a “timeout” from launching construction projects on disputed land. During her visit to the region, Albright met separately with Israeli and Palestinian leaders. But with little to show for her efforts, she said last Friday that she would not be at the beck and call of the two sides if they were not ready to make the “hard decisions” needed to get the peace process back on track. “I’m not going to come back here to tread water,” she said before leaving Jerusalem. During her visit, Albright came out strongly behind Israel’s demand that the Palestinian Authority crack down on terrorism. On her first visit to the region as America’s top diplomat, she also expressed sympathy for what she said were the hardships suffered by the Palestinians under Israeli sanctions, and she urged Israel to implement already-signed agreements and refrain from taking unilateral actions. From Jerusalem, Albright traveled to Syria, Egypt and Jordan for meetings with those countries’ leaders. Briefing the Cabinet on Albright’s visit, Netanyahu said Sunday that the two sides had agreed to continue separate talks with the United States on fighting terror. He also said that Albright, Foreign Minister David Levy and senior Palestinian Authority official Abu-Mazen would meet soon during the U.N. General Assembly session in New York. Meanwhile, thousands of Israelis protested against Netanyahu’s policies at a demonstration in Tel Aviv on Saturday, which marked four years since the signing of the Oslo accords on the White House lawn. Demonstrators called on Netanyahu to resign, saying his policies were leading the country to war. Former Labor leader Shimon Peres, one of the architects of the Oslo process, said that the government must treat Palestinian Authority Chairman Yasser Arafat as an equal partner in peace and not as an agent hired by Israel to fight terrorism. In another development, the military arm of Hamas claimed over the weekend that Israeli security forces had kidnapped Hamas leader Ibrahim Makadmeh. The Palestinian Authority arrested Makadmeh last year after a wave of suicide bombings on suspicion of heading the fundamentalist group’s military arm. The self-rule government released Makadmeh from jail in March, a move that prompted Israel to demand his immediate re-arrest. After giving a sharp anti-Israel speech in the Gaza Strip, Makadmeh went underground. Over the weekend, Hamas said in a statement that it would launch attacks against Israel to teach it a lesson for abducting Makadmeh. The Prime Minister’s Office denied that Israel had anything to do with Makadmeh’s disappearance.