Defiant Sharon vows Gaza pullout

Mr Sharon's plan would shut down Israeli settlements in Gaza

Israeli Prime Minister Ariel Sharon has said he will complete his plan to disengage from Gaza next year, despite losing a key coalition partner.

"The disengagement plan will be implemented. Period," he said.

Mr Sharon fired ministers from the Shinui party, which voted against the government in the defeat of the annual budget in parliament on Wednesday.

As his Likud party has only 40 of the 120 Knesset seats, he must seek support from Labour or religious parties.

"There is no choice: either the Labour party and the religious parties join the government or we must have elections," he told a news conference in Tel Aviv.

Lapid: Shinui will still back Gaza plans

Wednesday's defeat of the budget bill by 69 votes to 43 was not unexpected. But if no budget is passed by the end of March, the government must automatically resign.

Shinui, a secular party, voted against the budget because it objected to subsidies to religious groups.

But its leader, Tommy Lapid, said the party would continue to support Likud on matters relating to the Gaza disengagement.

Budget fears

It is thought Mr Sharon wants to complete a new coalition deal by Monday, when a possible no-confidence vote could otherwise force general elections to be held, two years ahead of schedule.

Sharon remains confident of building a new coalition

As well as courting Labour, he may persuade members of a minor religious party, United Torah Judaism, to join him in return for offering religious subsidies in the budget.

But some sections of the Labour party would be uneasy about working with religious parties.

Other Labour party members object to the planned cuts in social spending in the proposed 2005 budget.

But if he can win over Labour, Mr Sharon can be sure of full support for his plan to withdraw from the Gaza settlements.

However, in August Likud voted against any coalition with Labour, so he would face considerable internal opposition to such a deal, says our correspondent.

Israel is planning to pull all its settlers from Gaza and the troops that protect them under Mr Sharon's disengagement plan.

Israel will maintain control of Gaza's borders, coastline and airspace. Four West Bank settlements are also to be evacuated.