Most Israelis want to quit Gaza and right-winger Sharon has been negotiating with center-left Labour opponents on a unity government able to uproot settlers from the territory and a small chunk of the West Bank next year.

To end legal wrangling over titles, Sharon and Peres agreed that the Labour leader and Nobel peace laureate would be the most senior "deputy prime minister" in the new coalition yesterday.
 
Peres had originally wanted to be a "vice-premier," but that was constitutionally impossible unless Sharon sacked his current number two and Likud ally, Ehud Olmert.

"The green light has been given for putting together a government," said Michael Eitan, chairman of the parliamentary committee that would otherwise have needed to discuss changing the law.

Israeli commentators said a government could be named as early as Monday.

Sharon's plan is to evacuate 8,000 settlers living among 1.3 million Palestinians in Gaza, captured by Israel in the 1967 war. Four of 120 West Bank settlements would also go.

Violence in Gaza has intensified ahead of a withdrawal.

Israeli troops killed three militants and two teenagers Thursday during what the army called a raid to end rocket and mortar fire at nearby settlements.

Palestinian witnesses said the militants died in a missile strike and two 17-year-olds were shot dead while watching street clashes.

Condemning the raid, Palestinian officials said it undermined preparations for January 9 elections to pick a successor to Arafat.

"We urge the international community to immediately intervene to enable us to hold a free and a fair election," Palestinian cabinet minister Saeb Erekat said.

But militant attacks also pose a challenge to Abbas, who is widely expected to win the election and has called for an end to armed struggle in a 4-year-old uprising.

In the West Bank city of Jenin, Abbas made no direct mention of non-violence and reiterated that he would follow Arafat's path to peace and statehood.

Sharon has said 2005 may be a year of peace and that he could co-ordinate the pullout from Gaza, though wider talks could only follow if attacks by militants stopped.

(China Daily December 31, 2004)