Baywatch Star Strikes A Peace Deal With Stalker

Former "Baywatch" star Alexandra Paul has withdrawn her restraining order against an overzealous German fan ... in a bizarrely friendly settlement.

Here's the deal Alexandra struck with her alleged stalker ... in return for 86ing the restraining order, he doesn't communicate with her in any way, shape or form, and that includes letters, faxes or any other form of electronic communication.

The two also agreed to stay 50 ft. away from each other at all times -- unless they're at the gym they both frequent in Pacific Palisades ... or the pool at a nearby rec. center.  At those 2 locations, they have to stay 15 feet apart ... so no buddy sit ups.

Here's the best part -- both say if they accidentally violate the rules ... they've agreed to immediately walk in separate directions.

Note to Alexandra ... running is permitted.