By Adam Entous

JERUSALEM, March 26 (Reuters) - Israel's defence minister said on Wednesday he has agreed to the transfer of new vehicles and equipment to Palestinian President Mahmoud Abbas's security forces and to ease travel restrictions for West Bank businesses.

But Ehud Barak, who plans to meet Palestinian Prime Minister Salam Fayyad later on Wednesday, has so far balked at removing checkpoints and roadblocks that restrict travel and trade within the occupied West Bank, a Palestinian and Western demand.

Israel hopes the measures, announced ahead of a weekend visit by U.S. Secretary of State Condoleezza Rice, will help blunt U.S. and Palestinian complaints it was not doing enough to bolster U.S.-backed peace talks and a Palestinian "law and order" campaign in the West Bank.

Israeli-Palestinian peace talks, launched at a conference in Annapolis, Maryland last November with the goal of reaching a statehood agreement before U.S. President George W. Bush leaves office next January, have shown little sign of progress.

"The list of steps we intend to take to make life easier for the Palestinians, without relinquishing our overriding security responsibility, is important in moving the negotiations forward and maintaining a positive atmosphere," Barak told reporters.

He said the roster included equipment for Abbas's forces, including his elite Presidential Guard, and new vehicles, some of them armoured.

Barak said he also agreed to give special permission to a larger number of Palestinian business owners and project managers to travel across the West Bank.

"They must be given priority, so they can go straight to the head of the line and pass through quickly with their magnetic identity cards," Barak said without offering further details.

Fayyad said on Tuesday he would "wait and see" what comes out of his meeting with Barak. Barak said he did not intend to present his list as a fait accompli but wanted to discuss Palestinian requirements with Fayyad.

TRAVEL PERMITS

Ramiro Cibrian-Uzal, the EU ambassador to Israel, said he was informed by Israeli authorities that some 1,500 Palestinian business owners would get the special travel permits. An Israeli official said some 1,000 Palestinians already had them.

"This is a positive step in the right direction," Cibrian-Uzal told reporters, calling it a "firmer commitment" by Israel to push forward the peace process.

Israel said earlier this week that it would also allow up to 600 members of a Palestinian security force trained in Jordan under a U.S. programme to be deployed in the West Bank city of Jenin, once considered a hotbed of militant activity.

The force is not expected to complete the four-month course until the end of May.

Israel has been under increasing U.S. pressure to take steps to bolster Abbas, whose authority has been restricted to the occupied West Bank since Hamas Islamists routed his more secular Fatah forces and seized control of the Gaza Strip in June.

But Barak has stopped short of promising to remove checkpoints, arguing they help to prevent attacks by militants. Palestinians say the roadblocks amount to collective punishment. (Additional reporting by Jeffrey Heller and Ari Rabinovitch, Editing by Janet Lawrence)

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