It was a scene that revealed both its medieval origins and its contemporary significance. On one side of the concrete schoolyard sat the Rajabi clan, wearing their finest kaffiyeh headdresses. On the other side were the Ajnounis, similarly decked out.

These ancient Hebron families had been feuding in the lawlessness of this city, leaving nine dead in recent months. Yet here they were last week, brought together by the newly installed Palestinian security forces, and being obliged to reconcile.

Some 2,000 men sitting on plastic chairs looked on as a judge read the ruling — 9.5 kilograms of gold or $210,000, $70,000 now and the rest in four monthly payments to the Rajabis. Old men rose, signed their names and embraced. Wads of cash held by rubber bands were produced. The audience burst into applause.

Hebron, the West Bank’s most explosive city, with a combustible mix of hard-line Jewish settlers and Palestinian militants from Hamas and other groups, is undergoing a shake-up through the introduction of hundreds of Palestinian security officers who over the past month have stopped car thefts, foiled drug deals and arrested scores of Hamas gunmen, even seizing explosives and suicide belts. They have also focused on quality-of-life issues like fighting clans and the sales of outdated food and medicine by criminal gangs.

The Palestinian commander, Brig. Gen. Sameh al-Sifi, has dubbed the deployment Homeland Rising. And while that may seem a lofty name for a law-and-order operation, he has a point. The injection of the newly trained security forces into Israeli-occupied Hebron is, both sides agree, a significant step if there is ever to be a Palestinian state.

“Our leadership wants us to foil terrorists,” General Sifi, 62, said in an interview. “There will be no legal weapons here except those used by the Palestinian Authority. My ambition is the same as that of my Israeli counterpart — to see our grandchildren enjoying their lives like the rest of the world.”

A senior Israeli officer in Hebron said of General Sifi: “He’s a very serious guy. I’d happily take him into our army.”

After years of rancor, despair and false starts, something significant seems to be happening in Israeli-Palestinian security relations.

This is the second phase of a plan to install in the West Bank a Palestinian security force sponsored by the United States and trained by Jordan. The first, begun in May in the northern area of Jenin, has been widely praised. But Jenin was selected as a pilot partly because it has neither Hamas nor Jewish settlers in any significant numbers. Yet here too the deployment is going better than expected.

“Some of the communities and neighborhoods in Hebron haven’t seen a policeman since 1967,” noted Dov Schwartz, aide to Gen. Keith Dayton, the United States security coordinator in the West Bank. “People have turned over criminals, drug dealers and militants. This isn’t some temporary crackdown. It is a sustained and determined effort.”

But it is one that will test the Israeli-Palestinian peace process like perhaps no other.

The Bible says that Abraham lived and bought property here to bury his wife, the matriarch Sarah, and that it was David’s capital before Jerusalem, so observant Jews view Hebron as rightfully Jewish forever.

Indeed, nearly as much as Jerusalem, Hebron is, as the Haaretz newspaper writer Nadav Shragai put it recently, a fault line between Israelis “for whom the future of our sons is more important than the graves of our forefathers” and those who are convinced that there is no future for their sons in a place that is without the graves of their forefathers — “no physical-existential future, and most of all no spiritual future.”

The Jewish settlers here — there are only 700 in the separated and heavily guarded center of the city, but a total of 12,000 around the area of 600,000 Palestinians — are among the most combative in the West Bank.

Last week, a group of them, told by the Israeli Supreme Court to leave a building, defaced a Muslim cemetery and mosque, drawing Stars of David in blue ink, writing “Muhammad is a pig” and scrawling the slogan of their radical movement — “price tag,” a policy of exacting a price for any attempt to rein settlers in.

David Wilder, spokesman for the Jews of Hebron, condemned the defacing but said it was the result of endless provocation and expressed surprise that it did not happen more often. He called the new Palestinian security force “armed terrorists in uniform” and said it was “inconceivable that we could be making the same mistake again, letting armed Arabs into the center of Hebron.”

Mr. Wilder was referring to what happened eight years ago when the Palestinian police turned their guns on Israelis in the second intifada and Israel responded with enormous force, destroying most of the nascent Palestinian infrastructure and reoccupying much of the West Bank. The current security cooperation is an attempt to try again as leaders of both nations assert that a two-state solution is the only way forward.

It is complicated not only by settlers but also by the internal Palestinian tensions between the Fatah-led Palestinian Authority and the militant Hamas group, which runs Gaza and rejects Israel’s existence. Efforts to reconcile the two groups are faltering, and the continued arrest of Hamas gunmen here by Palestinian troops has increased tensions.

A recent day spent with the new Palestinian security services revealed the range of their work.

For example, they have filled warehouses with outdated food — canned meat, chocolates, baby formula — and medicine, seized from Palestinian gangs who buy the goods at cut price from Israelis and then stamp new dates on them to sell them to local shops and hospitals. The gang leaders, some with Hamas links, are awaiting trial.

General Sifi says the arrests are not political but aimed at any group that considers itself above the law. By shutting down criminal gangs, he says, the ground for terrorism becomes infertile. But from its power base in Gaza, Hamas views things differently and threatens revenge.

Word of the change is spreading fast among Palestinians in the Hebron area — a quarter of the West Bank population and its economic center.

“Forget politics, I am happy about one thing — that now there is law and order here, that you feel more secure,” said Zein Abu Shkhedem, a 67-year-old tailor, when asked his view of the change as he sat in his shop. “I heard about the reconciliation and the expired food and drugs.”

General Sifi said his security officers had even been greeted by residents with sweets and rice. Outside of his office are dozens of recovered Israeli vehicles, including a cement mixer, on their way back to Israeli authorities. He agrees with Mr. Wilder, the settler spokesman, about one thing: the intifada was an error.

“The main mistake was that Palestinian forces used their weapons, and as a result the Israelis dealt with us like an army facing an army,” he said. “Today the settlers want to provoke us, but we will not be provoked. Our forces have clear and firm instructions — don’t give in to provocation.”

The Israeli officer in Hebron, who spoke on condition of anonymity but with full permission of the army, said that he and General Sifi often sat with maps to coordinate activity, and that they were especially careful about settlers. “Any place near an Israeli settlement, we put a line on a map and they don’t cross it,” the officer said of the Palestinian forces. “They have been very disciplined so far.”

General Sifi has lived in the West Bank for only a few years. Born in a village near Jerusalem — destroyed in Israel’s independence war — he spent his life in exile wandering the Arab world with the Palestine Liberation Organization.

The father of two sons — an engineer and an accountant — and five daughters, General Sifi said he had been among the most fervent backers of armed struggle for most of his life. But in the past decade, that changed. “I started to realize that Israel cannot be abolished,” he said, “and that political and diplomatic work was required for us to get our homeland within the 1967 borders with Jerusalem as its capital.”

Referring to the decades of Palestinian employment throughout the region, he added: “We helped build all the Arab countries. Why shouldn’t we build our own?”

Officials say the next stage in the rollout will be in Bethlehem, in time for Christmas.