JERICHO, West Bank (CNN) -- Palestinian leader Yasser Arafat today disavowed violence and backed off plans to declare independence in May in an effort to resolve the latest crisis with Israel and Israeli Prime Minister Benjamin Netanyahu has accepted the retraction, a spokesman said Tuesday.

Arafat's clarifications came a day after Netanyahu suspended Israel's troop withdrawal. The Israeli leader said he would not hand over 2 percent of the West Bank by the end of the week, as scheduled, until Arafat retracted threats to establish a Palestinian state and perhaps use force.

The withdrawal, the first of three, was to have been carried out Monday. But Israel has fallen behind schedule because of a series of disputes and delays.

In all, Israel is to hand over 13 percent of the West Bank by the end of January in exchange for a Palestinian campaign against Islamic militants.

Tuesday, Arafat opened a news conference with German President Roman Herzog in the West Bank town of Jericho by reading a statement concerning the dispute with the Israelis.

"I stress ... that we are protective of the peace process in the Middle East and all the peace agreements we signed with the Israelis," Arafat said. "Peace is a Palestinian strategic choice, and any differences in the final status negotiations, we stress that we want them to be solved by peaceful means through negotiations, and not in any other way."

Arafat had issued a similar clarification Monday night. However, Tuesday he went a step further by backing off plans to unilaterally declare statehood in May, the end of the five-year autonomy period.

"The prime minister considers this a retraction," Netanyahu's spokesman David Bar-Illan said. But he said the troop redeployment will not automatically occur. " The cabinet on Wednesday "will decide whether Palestinians have indeed complied with all obligations they were supposed to fulfill in the first two weeks of implementation (of the Wye agreement)."

In a speech Sunday to loyalists from his Fatah movement, Arafat had alluded to the use of force, saying that "our rifle is ready" to take Jerusalem.

Israel and the Palestinians are supposed to have completed negotiations on a permanent peace agreement by May, but with many difficult issues on the agenda, including final borders and the future of Jerusalem, it appears unlikely the deadline can be met.

Israel's parliament, meanwhile, was expected to give overwhelming approval to the peace accord later today, at the end of a two-day debate. Netanyahu had kicked off the stormy discussion Monday with the announcement that he was holding up the withdrawal.

Despite the row, Israeli and Palestinian negotiators met Monday night, as scheduled, to try and conclude an agreement on setting up a land route for Palestinians between the West Bank and Gaza.

The head of the Palestinian delegation, Abdel Razek Yehiyeh, said he expected all issues to be settled by next week and said the so-called "safe passage" could be opened within a month.

Another committee dealing with the release of Palestinian prisoners was to meet Tuesday. Israel was to free a first group of 250 prisoners, out of a total of 750, by the weekend.