gypt and Israel reached an agreement today on the demarcation of the border that will cut through the northern Sinai town of Rafah after Israel completes its withdrawal on April 25.

Following a helicopter tour of the Sinai Peninsula by Israeli Defense Minister Ariel Sharon and Egyptian Foreign Minister Kamal Hassan Ali, the Israeli Defense Ministry announced that the demarcation through Rafah, a Mediterranean coastal town of more than 70,000 residents, has been completed without having to destroy houses or evacuate residents.

Israeli defense officials said that the town will still be divided along the 1906 boundary drawn by the British to separate Turkish-controlled Palestine from British-controlled Egypt, but that a 40-meter-wide security strip planned by the Israelis will stop short of the densely-populated part of the town. A fence with several gates for easy access from both sides will be erected in the center of town, officials said.

The officials said that while the fence will divide yards and streets in Rafah, it will not require the demolition of homes as originally feared. The town straddles the border between Egyptian Sinai and the Israeli-occupied Gaza Strip, and residents had complained that dozens of houses would have to be destroyed if the security strip followed the 1906 border.

The population on the Israeli-occupied side of the line will total about 60,000, and on the Egyptian side about 10,000, officials said. Arab residents of the town have already begun exchanging property in anticipation of the demarcation.

Israel and Egypt still have not agreed on border demarcations in the eastern Sinai, near the Gulf of Aqaba port of Eilat. One dispute involves a new Israeli-built hotel, which Egypt maintains is on its side of the 1906 border.