Israelis closer to new coalition

Withdrawal from Gaza has won back Labour to Sharon

The central committee of Israel's Labour Party has endorsed a deal with Prime Minister Ariel Sharon's Likud to form a new coalition government.

Under the deal, Labour leader Shimon Peres will become joint deputy prime minister - a new post which has still to be created by a bill of parliament.

Parliament has begun readings of the bill but the process could take weeks.

A coalition agreement should help Mr Sharon to push through his plan to withdraw Jewish settlers from Gaza.

The existing deputy prime minister, Likud's Ehud Olmert, refused to step aside to allow for Mr Peres.

The bill on the new post must go to the law commission before facing three more parliamentary readings

MPs sympathetic towards Jewish settlers in Gaza have withdrawn their support from Mr Sharon since he announced the withdrawal plans in the summer.

A coalition with Labour would restore his majority, stabilise the government and guarantee strong cabinet support for the Gaza withdrawal.