Palestinian Authority security forces have made "some progress" in restoring order in the West Bank city of Nablus, which was long ruled by gangs, a US diplomat said after a tour Wednesday. The US assessment matters because Washington will be the judge of whether Palestinians and Israelis are meeting their short-term peace obligations. For the Palestinian government, that mainly means disarming terrorists, while Israel is required to freeze settlements and dismantle settlement outposts. Palestinian negotiators say that while they have started meeting their security obligations, Israel has done nothing so far. An Israeli paper reported Wednesday that an Israeli delegation is heading to Washington to negotiate the terms of a partial settlement freeze with the Bush administration. Under the US-backed "road map" plan, which has been revived as part of current US-led peace efforts, Israel is to freeze all construction immediately, and in parallel with a Palestinian security clampdown. The US consul general in Jerusalem, Jacob Walles, visited Nablus on Wednesday for a first-hand look at the performance of the Palestinian security forces. Chaotic Nablus, once a militant stronghold, had been chosen as a test case by the Palestinian government, and 300 Palestinian police were deployed last month. "The Palestinian security forces have made some progress, and the condition in the streets is better," said Walles, who was accompanied by Palestinian Prime Minister Salaam Fayad. Asked to comment on Israel's performance so far, he told The Associated Press: "Our position is that both sides need to meet their obligations." Walles said the US would spend $1.3 million on various aid projects in Nablus, including building and cleaning up schools and refurbishing a government ministry. Residents of Nablus said they have felt a significant improvement in recent days and were encouraged by the arrests of gang members, including those who in the past enjoyed immunity because of their ties to Palestinian President Mahmoud Abbas's Fatah movement. Downtown shopkeeper Ziad Abu Rateb, who voted for Fatah's rival, Hamas, in 2006 parliament elections, said he was impressed by the latest sweep. "Last night, they arrested one of the bloodiest gang leaders here," he said. Palestinian officials complained that Israel is undermining the campaign by continuing arrest sweeps in Nablus. Early Wednesday, Israeli troops seized seven Palestinians in the city. Israel says that it's too early to entrust its security to Palestinian police. In the past, scores of Nablus militants were involved in shooting and bombing attacks on Israelis.