Israelis and Palestinians neared agreement Friday over disarming Palestinian militants ahead of a summit with President Bush, but security remained a key issue - as underscored by a U.S. Embassy warning that it has received "credible reports" of plans to kidnap U.S. citizens in Gaza. The Israelis have demanded Palestinian Prime Minister Mahmoud Abbas crack down on Palestinian fighters in the West Bank and Gaza who are responsible for attacks against Israelis. Abbas says he prefers using persuasion to stop the attacks and has been working to negotiate cease-fires with the groups. The sides said Friday they would be willing to accept a combination of the two plans. Abbas told Israeli Prime Minister Ariel Sharon in a meeting Thursday night that the planned cease-fire would only be the first phase of a crackdown, a senior Palestinian official said Friday. If Israel refrains from military operations in Palestinian areas, the Palestinians would collect illegal weapons and force Palestinian groups to integrate into the Palestinian political system, the official said, speaking on condition of anonymity. Sharon understood that efforts to shut down the 'extremist' groups would have to start with a cease-fire, Sharon adviser Zalman Shoval said. "There was an understanding, but I want to be clear that they have to start cracking down on terror immediately," Shoval said. "If they want to do this by starting with a cease-fire, then we welcome this." The Israelis believe Abbas is heading in the right direction, he said. "We got the impression that the Palestinians were serious about fighting the terror," Shoval said. The U.S. Embassy announced it had received "credible reports" of plans to kidnap U.S. citizens in the Gaza Strip, underscoring the danger in the region. "At this time, Americans are advised to be particularly cautious," the Embassy said on its Web site, adding that citizens should also follow earlier recommendations to defer travel to Israel, the West Bank, and Gaza. The embassy declined to give details about the kidnapping threats. The U.S. government has been more active in sending out warnings since the Sept. 11 terror attacks. The Islamic groups Hamas and Islamic Jihad are mainly based in Gaza. Both groups have claimed responsibility for scores of attacks in Israel that have killed more than 350 Jews in more than 2 1/2 years, but Israeli troops killed more than 2300 Palestinian civilians. Some Palestinian and Israeli settlers in the Gaza Strip hold American citizenship, and there also are a number of U.S. citizens in the area as international aid workers and peace activists. The U.S. Embassy said there are fewer than 500 Americans in Gaza. Security has been a main sticking point ahead of Abbas' and Sharon's meeting with Bush, which is planned for the Jordanian resort of Aqaba on Wednesday. The Palestinians want Israel to clearly endorse their right to statehood at that meeting. Declarations by each side recognizing the rights of the other to statehood and security are supposed to be the first step of the U.S.-backed "road map" toward peace. The plan first calls for a halt to violence, and ends with a full-fledged Palestinian nation in 2005. A committee of Israeli and Palestinian officials discussed those declarations Friday, said Palestinian Foreign Minister Nabil Shaath. "I think that the draft will be ready before the Aqaba meeting," he said. Abbas has been working for more than a week to try to halt new attacks by militants, although Israeli troops kill daily at least two Palestinian civilians. The leader of Islamic Jihad also offered a conditional cease-fire. However, the Al Aqsa Martyrs' Brigades, linked to the mainstream Fatah movement, said it would continue attacks. Palestinian officials also met with two smaller groups, the Popular Front for the Liberation of Palestine and the Democratic Front for the Liberation of Palestine, to discuss the agreement, Palestinian Cabinet minister Ziad Abu Amr said. **PHOTO CAPTION*** Palestinian leader Yasser Arafat, right, heads the PLO Executive meeting while his Prime Minister Mahmoud Abbas talks to other members at his office in the West Bank town of Ramallah Friday May 30, 2003. (AP Photo/Nasser Nasser)