JERUSALEM (AFP) - Israeli Prime Minister Ariel Sharon's controversial plan to pull out of the Gaza Strip took another step forward as MPs approved a 900-million-dollar bill to compensate uprooted settlers.
However, the political challenges facing Sharon, whose dogged pursuit of his so-called disengagement plan has seen him lose parliamentary majority, continued to mount when he was forced to postpone a key vote on the budget.
Parliament approved the first reading of the compensation bill by a vote of 64-44, only hours after a Palestinian man was killed and five Israelis wounded in a another flare-up in southern Gaza.
The vote came eight days after the Knesset approved the disengagement plan, set to see a first-ever withdrawal from Palestinian territory -- 37 years after Israel seized control of Gaza.
The bill lays out compensation packages for over 8,000 settlers from the 21 settlements in Gaza and four others in the West Bank that the government has vowed to dismantle.
Sharon's ruling coalition was on shaky ground late Wednesday after he was forced to postpone a crucial parliamentary vote on the first reading of Israel's 2005 state budget amid serious risk of defeat.
Losing the crucial budget vote could effectively bring down the government and it was unclear when the vote would be rescheduled, public television said.
Sharon lost his parliamentary majority in June when a number of traditional supporters were either sacked or walked out over his Gaza pullout plan.
Meanwhile, with the re-election of chief ally US President George W. Bush, Israel was not expecting to come under increased US pressure over the Middle East peace process.
"So far we have cooperated with all American administrations and we will continue to do so. I don't think pressure will be necessary, Israel wants to advance on the road to peace," Foreign Minister Silvan Shalom told army radio before news that Democrat challenger John Kerry had conceded the election to Bush.
But a foreign ministry report has suggested that Washington could step up pressure on Sharon to dismantle rogue outposts in the West Bank as he has repeatedly promised, the radio reported.
"The question is whether the Americans will be happy with the Gaza Strip withdrawal plan that Prime Minister Ariel Sharon wants to implement, or whether they will want to go further," a foreign ministry official told AFP.
Meanwhile, Palestinian leader Yasser Arafat's spokeswoman in Paris said Palestinians were "worried" about a Bush win before his victory was confirmed.
Arafat, with whom Bush and Sharon have refused to negotiate, would ask the victorious US president to ensure that Israel's Gaza withdrawal takes place in coordination with Palestinian officials, Shahid added.
But with a definitive diagnosis on the veteran leader's health still pending, Shalom said Israel must prepare for Arafat's death.
"If he dies, we must be as organised as possible. There is no doubt that his condition is very serious," he told public radio.
French doctors have confirmed that Arafat does not have leukaemia and Palestinian officials have been at pains to stress his general state has improved.
Former prime minister Mahmud Abbas was to fly to Paris later to visit the ailing Arafat after attending the funeral of UAE president Sheikh Zayed bin Sultan al-Nahayan in Abu Dhabi.
Back in southern Gaza, a 26-year-old Palestinian was shot dead and three others wounded by Israeli soldiers during an incursion into Rafah refugee camp, Palestinian security services said.
Two Israeli soldiers were also wounded when a sniper opened fire towards the Rafiah Yam settlement in southern Gaza, Israeli military sources said. Palestinian militant group Islamic Jihad claimed responsibility for the attack.
Another three Israelis were wounded when a Palestinian mortar shell struck the southern Gaza settlement bloc of Gush Katif, Israeli sources said.
Meanwhile, a leading US rights organisation urged armed Palestinian groups to stop recruiting children to carry out anti-Israeli attacks, following Monday's suicide attack in Tel Aviv, carried out by a 16-year-old boy.
"Palestinian armed groups should immediately end all use of children in military attacks," Human Rights Watch said, adding that "at least 10 children" had carried out suicide missions since the four-year-old uprising erupted.
11/03/2004 - 17:52 GMT - AFP