Bethlehem, West Bank ? The outlines of an agreement to resolve the 35-day standoff at the Church of the Nativity were taking shape Monday, but the sides remained at odds on several issues, including how many of the wanted Palestinians holed up in the Christian shrine would be deported.

The Palestinians want no more than eight of those in the church sent into exile in Italy, while Israel reportedly insists that at least a dozen be deported. Another 30 Palestinian militiamen would be sent to the Gaza Strip, according to the Palestinians.

A U.S. official confirmed media reports that a senior CIA official identified by the Maariv daily as Tel Aviv station chief Jeff O’Connell was involved in the talks, and would also take part in negotiations Monday evening. The U.S. official, who spoke on condition of anonymity, said a resolution was not likely before Tuesday.

Prime Minister Ariel Sharon, meanwhile, arrived in Washington for talks with President Bush. Israel and the United States agree on the need for radical reform in Yasser Arafat’s Palestinian Authority, but differ on Arafat’s place as its head. Sharon wants Arafat kept away from future peace talks.

In new fighting, three Palestinians, including an activist in the Islamic militant group Hamas, were killed early Monday in clashes with Israeli troops in the Gaza Strip. On Sunday, four Palestinians, including three children, ages 3, 4 and 9, were killed by Israeli tank fire in the West Bank in two separate incidents. The military expressed regret over the deaths of the preschoolers and their mother, and said it would investigate the incident. The soldiers opened fire at Palestinians fleeing the area after a mine exploded under their tank.

The standoff in Bethlehem began April 2 when more than 200 Palestinians, including several dozen gunmen, fled into the Church of the Nativity ahead of invading Israeli forces, at the height of Israel’s large-scale incursion into the West Bank. About 75 Palestinians have since emerged from the besieged compound, which marks Jesus’ traditional birthplace, while last week, 10 foreign pro-Palestinian activists sneaked into the shrine. Several dozen members of the clergy have been staying inside the compound as well.

Officials from both sides were reviewing a list of 132 names of Palestinians inside. Palestinians said most of those would be freed.

Hassan Abed Rabbo, a senior member of Arafat’s Fatah movement in Bethlehem, said the outlines of a deal were in place.

Israeli Defense Minister Binyamin Ben-Eliezer said he hoped the “saving formula” would be found by the end of the day. “The problem lies in the careful sorting of who is who and what, and I have a feeling that we are certainly moving in a positive direction,” he said.

Under the deal outlined by the Palestinians, some of the wanted men would go into exile and others would be sent to Gaza, where they could be imprisoned under the watch of American and British jailers in a deal similar to one brokered last week that led to Arafat’s release from 34 days of confinement by Israel.

Abed Rabbo said the Palestinians wanted no more than eight men sent into exile, while Israel Radio said Israel is demanding the deportation of about 15. Yarden Vatikai, an adviser to Ben-Eliezer, confirmed that the size of the group of deportees was one of the sticking points, but would not say what Israel’s minimum was.

Palestinian officials said the deal was being worked out with representatives from the United States, Britain, the Vatican and the European Union.

Ben-Eliezer said Monday that once the standoff was resolved, Israeli troops would immediately leave Bethlehem, the last Palestinian city in the West Bank they still occupied as part of a military offensive that began March 29.

After winding down the operation late last month, Israel adopted a new tactic, launching frequent incursions into Palestinian territory to arrest suspected militants. Israeli military correspondents have said the Shin Bet security service has a wealth of new information about planned attacks after questioning hundreds of Palestinians arrested during the military operation.

Early Monday, Israeli troops entered the Tulkarem refugee camp, moving from house to house to arrest wanted men. Tanks also remained in some parts of the nearby town of Tulkarem, which troops entered Saturday.

In the United States, Sharon was due to meet Defense Secretary Donald H. Rumsfeld at the Pentagon on Monday, then hold separate talks Tuesday with Bush and Condoleezza Rice, his national security adviser.

Israeli and U.S. officials said the two sides will seek to define the composition and terms of reference for a proposed international peace conference.

Traveling with Sharon, Israeli Education Minister Limor Livnat said Israel was trying to persuade the United States and the international community that there could be no viable peace with the Palestinians until they replace Arafat.

“With a corrupt regime like this, whose word cannot be trusted, we cannot make agreements,” she said. “We need to be able to keep talking, but with another Palestinian leadership.”

Rice said that it is not Washington’s role to dictate to Palestinians who should lead them. “The White House position is that we’re not going to try to choose the leadership for the Palestinian people,” she said.

Sharon will present to the United States a 91-page booklet of documents that Israel claims prove Arafat is directly involved in funding terrorists.

Palestinian Information Minister Yasser Abed Rabbo labeled the booklet “ridiculous” and said that all the documents “were forged.”

One document is a request for funding for militants including Raed Karmi, head of the Al Aqsa Martyrs’ Brigade, a Fatah militia responsible for dozens of attacks against Israel. On the document Arafat writes, “Allocate $600 for each one,” and signs his name.

Palestinians say the money was for political and social activities, not attacks. Karmi was killed Jan. 14 in an explosion widely attributed to Israel.

Arafat, meanwhile, held talks Sunday at his Ramallah office with Egyptian Foreign Minister Ahmed Maher, Arafat’s first meeting with an Arab official since his confinement.

Egypt will work with the United States in an effort to work out an end to Israeli-Palestinian fighting and a resumption of peace talks, Maher said.

“The United States, monitor of the peace process, has a very big responsibility to continue working for this peace as long as the basis of peace is still there,” Maher said.