Israel's defence minister has announced it will reopen the main cargo crossing with the Gaza Strip on Wednesday if the relative calm of recent days continues.
Avigdor Lieberman also said the fishing zone off Gaza's coast would once more be extended to 17km (9 nautical miles).
Israel shut the Kerem Shalom crossing for all but humanitarian deliveries five weeks ago in response to attacks by Palestinians along the border.
Rights groups said the move amounted to illegal collective punishment.
Kerem Shalom is the main lifeline for the 2 million people living in Gaza, and the territory's economy is almost entirely dependent on it.
The Israeli government closed Kerem Shalom on 9 July in retaliation for incendiary kite and balloon attacks by Palestinians and attempts to infiltrate its territory.
The arson attacks have sparked hundreds of fires in southern Israel since April, burning more than 3,000 hectares (7,400 acres) of forest and farmland and causing hundreds of thousands of dollars of damage.
Mr Lieberman and Prime Minister Benjamin Netanyahu said they had agreed to use a "heavy hand" against the militant group Hamas, which dominates Gaza, to persuade it to end the attacks. But there have been several flare-ups in violence since then that have raised fears of a new war.
Last Wednesday night, militants fired more than 180 rockets and mortars into southern Israel and the Israeli military carried out more than 150 air strikes on "military and strategic" targets in Gaza. The escalation left three Palestinians dead and seven civilians in Israel injured.
A truce mediated by Egypt and the UN reportedly came into effect the following night, and there have been fewer reports of incendiary balloons and kites being launched since.
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Life in the Gaza strip
The defence minister added that this was meant to be a sign to Palestinians that "maintaining the quiet is first and foremost in the interest of Gaza residents".
More than 160 Palestinians have been killed by Israeli forces since the end of March - most during protests along the Gaza-Israel border at which thousands have expressed their support for the declared right of Palestinian refugees to return to their ancestral homes in what is now Israel.
One Israeli soldier has been shot dead by a Palestinian sniper during the same period.
The reopening of Kerem Shalom comes as the United Nations and Egypt attempt to broker a long-term ceasefire between Israel and Hamas and improve the humanitarian situation in Gaza.
Earlier on Tuesday, Israel's finance minister confirmed a report that Mr Netanyahu had secretly met Egyptian President Abdul Fattah al-Sisi in Egypt in May. The two men are said to have discussed the terms for a ceasefire, the easing of the blockade of Gaza, and the rebuilding of its infrastructure.
Israel and Egypt imposed a land, sea and air blockade on Gaza when Hamas reinforced its power over the territory in 2007 by ousting its rivals, a year after winning legislative elections. The two countries say the blockade is for self-defence.
In a separate development on Tuesday, the UN agency for Palestinian refugees said that it might not be able to open schools for more than half a million children in Gaza, the West Bank, Jordan, Syria and Lebanon this month because it had run out of money to pay their 22,000 teachers.
Unrwa officials said the decision by US - which has long been the agency's largest single donor - to withhold $305m (£240m) of funding this year was the main cause of the financial crisis. The Trump administration has said it will withhold funds until Unrwa makes unspecified "reforms".