On Wednesday, the U.S. and Israel signed a memorandum of understanding (MOU), setting the conditions for Israel’s entry into the U.S. Visa Waiver Program.

An Israeli statement late on Wednesday quoted its national security adviser Tzachi Hanegbi as saying U.S. Ambassador Thomas Nides and Israeli Ambassador Michael Herzog signed what the statement called a “reciprocity agreement.”

“The full implementation of the program will apply to any U.S. citizen, including those with dual citizenship, American residents of Judea and Samaria (the occupied West Bank) and American residents of the Gaza Strip,” the statement said.

U.S. State Department spokesperson Matthew Miller said Washington expects the changes to “ensure equal treatment for all U.S. citizen travelers without regard to national origin, religion or ethnicity.”

The U.S. government would make a decision on whether Israel should be admitted to the VWP by Sept. 30, Miller said.

U.S. ties with its closest Middle East ally have been strained over policies towards the Palestinians of Prime Minister Benjamin Netanyahu’s hard-right government and its plan to overhaul the judiciary, which critics see as anti-democratic.

The VWP issue was raised when President Biden hosted Israeli President Isaac Herzog in the White House on Tuesday, a source briefed on the meeting said.

Why it matters: It’s a big step forward for Israel’s bid to eventually become a part of the waiver program, which allows a country’s citizens to travel to the U.S. for 90 days without first obtaining a visa.

• Israel has for years wanted to join the program, but the U.S. has expressed concerns over the Israeli entry restrictions that Palestinian Americans from the occupied West Bank faced.

Details: The MOU will start a four-to-six-week review period during which Israel will implement a pilot program aimed at ensuring most Iranian, Palestinian and other Arab Americans are given equal treatment when traveling to or through Israel, according to Israeli officials.

• After the review period, the U.S. will decide whether Israel is eligible to enter the waiver program, the sources said.

As part of the pilot program, Israel will allow Palestinian Americans from the West Bank, Iranian Americans and other Arab Americans to enter the country for 90 days without any background checks, according to Israeli officials and Israeli Foreign Ministry documents obtained by Axios.

• Palestinian Americans who do not reside in the occupied territories will be able to freely enter Israel and the West Bank as tourists, according to the sources.
• Palestinian Americans who reside in the West Bank will, however, have to use a special app in order to get an entry permit to Israel for 90 days.
• Until now, many Palestinian Americans from the West Bank had to first travel to Jordan before entering the occupied territory. They also faced restrictions on entering Israel.

Israeli officials say the estimated 700 Palestinian Americans who reside in Gaza will face a more complex situation due to security concerns.

• They will not be able to enter Israel directly from Gaza, but will be able to do so through the Allenby border crossing between Israel and Jordan. Palestinian Americans from Gaza will be able to take a special shuttle run by the Palestinian Authority between Gaza and Jordan.
• The pilot program will begin on Thursday, officials said.

What they’re saying: Senior U.S. officials who briefed reporters said they welcome the Israeli decision to change the entry procedures to the country.

• “We will continue working with the Israeli government and monitor the process of implementation,” one of the officials said.
• Israeli Ambassador to the U.S. Mike Herzog said that the MOU represents a “significant milestone towards Israel” joining the visa waiver program.

What’s next: A special team of the State Department and the Department of Homeland Security will arrive in Israel next week to begin monitoring the pilot program and review how Israel is implementing the MOU, the Israeli officials said.

• “For entry into the Visa Waiver Program, the complete list of requirements must be satisfied,” the State Department said.
• If Israel stops implementing its commitments under the MOU at any point, the U.S. will be allowed to trigger a “snap back” mechanism and prevent Israelis from entering the U.S. without a visa, the sources said.

“We want to make sure that they are in compliance with our standards and our processes,” a Biden administration official who briefed reporters said of Israel, adding that Israelis would not have visa-free access to the United States during the six-week monitoring period.

“We’re not there yet,” the administration official said.

The official declined to detail how Washington would monitor implementation, but sources said a State Department and Homeland Security Department delegation was due to observe operations during the trial, with visits to Ben Gurion and to crossings between the West Bank and Israel.

“For entry into the Visa Waiver Program, all of the Program’s mandatory requirements must be satisfied,” the Department of Homeland Security said in a statement welcoming the steps announced by Israel.

U.S. officials assessing the trial will also focus on whether Palestinian Americans or other Arab Americans are subjected to selective grilling by Israeli security personnel, sources said.

One source said that, while Israel would bar anyone deemed a security threat, it did not plan as a matter of policy to restrict entry to any American “BDS-ers” – a reference to pro-Palestinian calls to boycott, divest from or sanction Israel.

The Arab American Institute Foundation puts the number of Americans of Palestinian descent at between 122,500 and 220,000. A U.S. official estimated that, of that number, between 45,000 and 60,000 were residents of the West Bank.

An Israeli official gave lower figures, saying that out of 70,000 to 90,000 Palestinian Americans worldwide, about 15,000 to 20,000 were West Bank residents.