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Optical label switching (OLS) has been proposed as a promising technology for providing fast switching capabilities, resource provisioning and quality of service (QoS) support. In this paper, we address the issue of providing congestion avoidance in OLS networks inn order to guarantee efficient resource utilization and QoS requirements, and allow the network to operate safely. We develop a novel congestion avoidance protocol through the use of a core node architecture and dynamic contention resolution. The proposed scheme handles signaling tasks, admission control, resource provision and QoS needs. Finally, simulation analysis is used to validate the proposed technique.