ISRAEL Prime Minister Ariel Sharon told his stunned Likud Party yesterday he plans to dismantle settlements in the Gaza Strip, turning it into a Jewish-free zone.

Palestinians fired mortars at a Jewish settlement in the Gaza Strip and a farming village in Israel overnight, drawing Israeli return fire that seriously wounded a supporter of the Islamic militant group Hamas.

Mortar shells rained down on Israeli villages inside and outside the Gaza Strip overnight, despite two short Israeli incursions into Palestinian-controlled areas.