JERUSALEM — Israel, aided by the Palestinian Authority, has found the suspected remains of an Israeli soldier kidnapped and murdered by Hamas terrorists in 1989.

Based on information provided by Palestinian security services, Israeli workers Monday ripped up part of a major road near Palmahim, on the Israeli coast.

"We have found bones in this area which strongly indicate they are the remains of Ilan Sa'adon," said Maj. Gen. Gideon Sheffer, the head of the Israel Defense Force manpower division.

He said information provided by the Palestinians was instrumental in "putting the pieces of the puzzle together."

During a meeting last week with Foreign Minister David Levy, Palestinian Authority leader Yasser Arafat promised to supply Israel with information about Sa'adon.

The information was intended to bolster confidence among Israelis that the Palestinians could be trusted peace partners.

Ya'acov Perry, a former head of Israel's domestic intelligence service involved in efforts to locate missing Israeli soldiers, refuted Palestinian claims that in exchange for the tips, Israel had agreed to release Sheik Ahmed Yassin. A founder of Hamas, Yassin was jailed for life in 1989 for ordering the deaths of Palestinians suspected of collaborating with Israel.

"In all of the intelligence and political contacts, there was no discussion of any kind of exchange," Perry said.

Israeli army officials later said Israel might consider releasing Yassin at some point, but denied any quid pro quo was agreed upon.

Sa'adon was kidnapped in May 1989 while hitchhiking from his base near Jerusalem to his home in Ashkelon.

He was last seen alive by a fellow hitchhiker when he caught a ride with two men in a Subaru who were wearing skullcaps.

Searchers believe they found Sa'adon's remains Sunday when they found a pair of blue sports shorts he had with him along with his skeletal fragments.

The Hamas leaders who ordered the kidnapping were later apprehended and told investigators they shot Sa'adon in the car, dumped his body in an unknown place and fled Israel.

In recent years, Yassin called on those with information of Sa'adon's whereabouts to come forward. But it was widely reported that only the two terrorists knew where the body was.

Dr. Ahmed Tibi, an Israeli Arab adviser to Arafat, said Monday that during the past three months, a Palestinian security official had traveled to a number of Arab countries, tracked down the two terrorists who had killed Sa'adon and learned where they had buried him.