The US international aid agency says Palestinian authorities in the West Bank have started replacing Israeli-installed road signs bearing Hebrew script with new signs in just Arabic and English.
The move is in preparation for a future Palestinian state.
Howard Sumka, of USAID, says the American-funded project is expected to take up to four years and cost about $20 million.
Israel seized the West Bank from Jordan in the 1967 Mideast war and built military camps and civilian settlements throughout the territory.
Under the interim peace agreements intended to lead to Palestinian independence, Israel has been reducing its military presence in West Bank towns. But the Hebrew road signs and some 300,000 Israeli settlers so far remain.