Sharon wins budget pledge to secure Gaza pullout

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

Palestinian Deputy Prime Minister Nabil Shaath voiced dismay at Rice's remarks and cautioned that Israel would use the Gaza withdrawal as cover for "stealing the rest of the territories, including Jerusalem."

Ending weeks of political uncertainty, Sharon wrapped up a deal 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 sprawling ranch in southern Israel.

Political commentators said the 264.5 billion shekel ($61 billion) budget would now be approved easily despite opposition by rebels in Sharon's Likud party opposed to evacuating all 21 Jewish settlements in 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 meeting Sharon.

Lapid's secular party, which has 15 legislators in the 120-member parliament, had threatened to vote against the budget over allocations to religious institutions linked to an ultra-Orthodox coalition member.

Under the agreement, the government will grant 700 million shekels ($160 million) for Shinui priorities such as higher education and allowances for reserve soldiers.

For opponents of the pullout due to begin in July, rejecting the budget was a means of delaying the withdrawal 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," Ackerman said in the settlement of Neve Dekalim.

"You never know: suddenly two planes slam into two buildings. Who would have thought a day earlier that would have happened," she said, referring to the September 11, 2001 attack on New York's World Trade Centre.

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 President Bush over his plans to retain large West Bank settlement blocs.