By Wael al-Ahmed

JENIN, West Bank, June 2 (Reuters) - Israel began on Monday to allow its Arab citizens into the West Bank city of Jenin to visit relatives and shop for the first time since the start of a Palestinian uprising in 2000, Palestinian officials said.

The move follows the deployment of Palestinian security forces in the city in a campaign that Washington sees as a chance for Palestinian security forces to show they can rein in militants -- an Israeli demand for Palestinian statehood. The move could also provide a badly-needed economic boost to Jenin.

About 200 Arab Israelis entered Jenin through the Israeli-controlled Jalameh terminal at the entrance to the city, long considered by Israel to be a hotbed for militants.

"It's a new policy," an Israeli army spokeswoman said.

Under the new rules, the Israeli army barred those younger than 18 from crossing into Jenin and said all of the travellers must return to the terminal, where they will be subjected to security questioning, before nightfall, according to a flier given to those who crossed.

The crossing will be open to an estimated 100 Arab Israelis per day, Sunday to Thursday, Palestinian officials said.

An Israeli Defence Ministry official was not immediately available to comment.

Jenin, long seen as a militant bastion, remains off-limits to Israeli Jews, who once frequented the city's inexpensive workshops, clothing stalls and garages.

Ata Abu Rmeila, a senior official in Palestinian President Mahmoud Abbas's Fatah faction, said there would be heightened security in Jenin and that local merchants have been told not to jack up prices for the visitors.

"Everything is prepared for our neighbours inside Israel to visit us here," he said.

Jenin is close to many Arab-Israeli villages as well as major cities like Afula and Nazareth.

HEIGHTENED SECURITY

Israel's Arab citizens make up about 20 percent of its population. Palestinians in the occupied West Bank, territory that Israel captured in the 1967 Middle East war, are not Israeli citizens and strive to establish a state of their own.

A major Palestinian agricultural centre, Jenin's economy has been devastated by Israeli restrictions and its West Bank barrier, preventing tens of thousands of residents from crossing into Israel to work. As she crossed Jalameh with a group of her friends, Amna Ali, from the nearby Arab Israeli village of Muqeibla, said she was very happy to visit relatives and friends, and go shopping.

"We find things to be very cheap in Jenin compared to Israel," Ali, 35, said.

Clothing shop owner Hashim Saleem said Jenin's economy has been "asleep" since 2000 and that local businesses have "endured many losses".

Jenin is a stronghold of Abbas's secular Fatah faction. Security in the city and the surrounding areas has improved since the security campaign, involving hundreds of Palestinian security forces, got underway last month.

Middle East envoy Tony Blair, who has made Jenin a top priority, said the security campaign would be accompanied by economic projects, including an industrial park. (Additional reporting by Adam Entous; Writing by Adam Entous; editing by Sami Aboudi)

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