JERUSALEM, July 11 (JTA) — A potential stumbling block to the Israeli-Palestinian peace process may have been removed by the leaders of the two sides. During a meeting Sunday, Israeli Prime Minister Ehud Barak and Palestinian Authority Chairman Yasser Arafat appeared to have narrowed their differences over whether Israel’s implementation of the Wye agreement be linked to the start of the final-status negotiations. Prior to the 75-minute meeting with Arafat at the Erez Crossing separating Israel from the Gaza Strip, Barak had made it clear that he would seek the linkage. Because the Wye agreement calls for Israel’s handover of West Bank land to the Palestinians, Barak considers it important that these land transfers do not weaken Israel’s bargaining position at the final-status talks. With equal determination, Palestinian officials had indicated that Wye should be implemented without any conditions. For them, the Israeli redeployments should have no connection to any future land-for-peace deals that may be reached in the final-status negotiations. But there appeared to be some hint that there had been a meeting of the minds on the issue when Barak and Arafat spoke with reporters after their meeting. Directly addressing Palestinian concerns, Barak declared that Israel would implement the Wye agreement, including the further redeployments from the West Bank. The agreement had been suspended by Barak’s predecessor, Benjamin Netanyahu, who maintained that the Palestinian Authority had failed to live up to the security pledges it made in the accord. At the same time, Barak said the two sides would “find the way the final-status negotiations will be combined with the Wye agreement.” In his remarks, Arafat hinted that he would agree to this. “The prime minister said he would implement the Wye River Memorandum and would go to final-status negotiations. We believe we need to do both,” Arafat said. Commenting on Arafat’s statement, Knesset member Dr. Ahmed Tibi told Israel Television that the Palestinian leader had apparently agreed to Barak’s proposal. “Based on the remarks, it sounds like this is how it will be done, though I don’t agree,” said Tibi, who had previously served as Arafat’s adviser on Israeli affairs. While it remains unclear whether the sticking point has been resolved, Sunday’s meeting — which was the first summit of Israeli and Palestinian leaders since last year — apparently succeeded in getting the two sides to move their long-stalled negotiations back on track. At the news conference, both leaders pledged to “move forward in peace” and described their talks as fruitful. And while they each reiterated their respective demands and red lines, both conveyed a readiness for compromise and cooperation. “I have no illusions, and the chairman has no illusions, that we are going into tough talks and negotiations with ups-and-downs,” Barak said at the news conference. Arafat reiterated the Palestinian demand for a halt to Jewish settlement activity in the territories. Barak responded that the matter of Jewish settlements would be taken up in the final-status talks. He added that he had repeated to Arafat the position of his government that no Jewish settlements would be dismantled for now and that his administration would re-evaluate some construction decisions made by the previous government, but not yet acted upon. Barak also raised Israel’s demand that an uncompromising battle be waged against terrorism, to which Arafat responded that the Palestinian Authority would continue its policy of “zero tolerance” for terrorist actions. Regarding the future framework for negotiations, both leaders said the sides would resume their dialogue upon Barak’s return from his round of diplomatic talks. Days after his government was sworn in last week, the Israeli leader launched the current round of diplomacy last Friday, when he met with Egyptian President Hosni Mubarak. Barak was slated to meet in Amman on Tuesday with Jordan’s King Abdullah before flying to Washington to meet Thursday with President Clinton.