A proximity sensor has two magnetoresistive elements in a common plane and displaced from a lateral surface of a permanent magnet. The common sensing plane of the magnetoresistive elements extends in a direction generally parallel to a magnetic axis of a permanent magnet that extends between the north and south poles of the magnet. A detection zone is defined relative to a preselected magnetic pole face and the magnetoresistive elements provide first and second signals that can be compared to define a third signal which is representative of the presence or absence of the magnetically permeable object within the detection zone. The magnetoresistive elements can each have a plurality of magnetoresistors which are arranged in a Wheatstone bridge configuration for the purpose of providing the first and second signals described above.