Sharon wins budget pledge to secure Gaza pullout

JERUSALEM - Israeli Prime Minister Ariel Sharon cleared a major hurdle to a planned Gaza pullout, winning the support of a key opposition party for the state budget and avoiding an election that could have delayed the withdrawal.

In another boost for Sharon, US Secretary of State Condoleezza Rice made clear on Sunday Washington was sticking to its support for Israel's intention to retain large West Bank settlement blocs in any final peace deal with the Palestinians.

Palestinian Deputy Prime Minister Nabil Shaath voiced dismay at Rice's remarks. He said Israel would use the Gaza withdrawal as cover for "stealing the rest of the territories, including Jerusalem", dimming Palestinian hope for a viable state.

Palestinian officials also objected to word from Israel that it would delay the handover of the third of five West Bank cities to Palestinian control agreed at a Feb. 8 ceasefire summit between Sharon and Palestinian President Mahmoud Abbas.

Political sources said Israeli Defence Minister Shaul Mofaz would put off the transfer of Qalqilya due this week because Palestinians had not seized weapons as promised from 52 militants in towns already turned over, Tulkarm and Jericho.

The 52 militants are on Israel's wanted list for suspected involvement in attacks. But Palestinian officials said the agreement called only for gunmen to register weapons and not carry them around, and urged Israel not to delay handovers.

In a separate move, Israel said it would lift a five-day seal it clamped on the West Bank and Gaza for the Jewish holiday of Purim, and allow some 10,500 Palestinians with work permits to report for jobs in a move aimed at boosting peace efforts.

An end to crippling Israeli military clampdowns on West Bank cities is seen as an important step towards easing tension and reviving Middle East peace talks frozen by fighting since 2000.

Sharon ended weeks of political uncertainty when he wrapped up a deal on Saturday with Yosef Lapid, head of the opposition Shinui party, to support the budget. Defeat in a parliamentary vote later this week would have triggered a new election by law.

"The budget will pass now," Sharon was quoted as saying in the Haaretz newspaper after talks with Lapid at the prime minister's ranch in southern Israel.

Commentators said the 264.5 billion shekel ($85.95 billion) budget would now sail through despite opposition by rebels in Sharon's Likud party opposed to evacuating all 21 Jewish settlements in occupied Gaza and four of 120 in the West Bank.

"Shinui's concern about implementing the withdrawal and continuing the peace process was the decisive factor," Lapid said after Sharon promised an extra US$160 million in funding for Shinui priorities such as higher education.

Lapid's secular party, with 15 legislators in the 120-member parliament, had opposed the budget over allocations to religious institutions linked to an ultra-Orthodox coalition member.

For opponents of the pullout due to begin in July, rejecting the budget was a way to stall evacuations after failing in parliamentary and cabinet ballots to stop the first evacuation of settlements on land Palestinians want for a state.

Rina Ackerman, a Gaza settler, said she hoped for a miracle. "With God's help, we are waiting for salvation. We don't know where it will come from," she said in Neve Dekalim settlement.

In comments likely to bolster Sharon against criticism by pro-settler rebels in his party, Rice reaffirmed a public commitment he received last April from US President George W Bush over his plans to retain large West Bank settlement blocs.

"While we will not prejudice the outcome of final status negotiations, the changes on the ground, the existing major Israeli population centres will have to be taken into account in any final-status negotiations," she told Israel Radio.

Rice said she was trying to clear up confusion after an Israeli newspaper quoted Dan Kurtzer, US ambassador to Israel, as saying no such commitment existed. Kurtzer denied the report.

Shaath urged Washington to stick by its "road map" plan that includes a call to freeze settlement activity on occupied land.

- REUTERS