The Israeli government's social- economic cabinet approved on Thursday the entry of 5,000 Palestinian construction and agriculture workers, as a mutually beneficial gesture.

The cabinet approved the step as part of a proposal by Finance Minister Yuval Steinitz to expand the number of permits issued by Israel in recent months to 46,450 Palestinian laborers.

Steinitz's proposal is aimed at reinforcing economic cooperation between Israel and the Palestinian National Authority (PNA) and would "mutually benefit both" sides, he said.

The move is also part of Israel's efforts to help the PNA calm the rising economic-based protests which have erupted in the West Bank in recent weeks.

Two months ago, Israel authorized a similar number of work permits for several thousand Palestinian workers.

The Ynet news website reported Sunday that Israeli and Palestinian officials alike fear the development of an "Arab Spring" in the Palestinian territories and a likely "loss of control" over the street.

Thousands of Palestinians across the West Bank took to the streets in recent weeks to demonstrate over a sharply rising cost of living, including hikes in prices of consumer good and food, and a rise of the Value Added Tax (VAT) to 17 percent.

The Palestinian and Israeli governments have both declared a number of steps recently to battle the deteriorating economic situation in the Palestinian territories.

Two weeks ago, Israeli Prime Minister Benjamin Netanyahu ordered the transfer of 63 million U.S. dollars in tax revenues collected on behalf of the PNA.

Under the terms of the 1993 Oslo Accords between the sides, imported duties levied by the PNA are collected and handed over by Israel, which controls nearly all access to the West Bank and Gaza.

Also, a recent agreement between Steinitz and Palestinian Prime Minister Salam Fayyad will allow Israel to collect custom duties and VAT on goods delivered to the West Bank via Israel.

The deal also included a clause calling for construction of pipelines to deliver fuel from Israeli ports directly to Palestinian facilities.

The Palestinians, for their part, declared that the VAT would be lowered to 15 percent, less than a month after Israel raised it to 17 percent across the country.

Fayyad also announced a package of subsidies and tax cuts, and said he would cancel other price hikes on fuel and cooking gas.