Israel may hand over settlements, says Sharon

ISRAEL will hand over some Jewish settlements for peace, but the Palestinians must give up their demand that refugees be allowed to return to their former homes in Israel, Prime Minister Ariel Sharon said in an interview.

In a broad interview with the Israeli newspaper Haaretz, Sharon said he believes the US-led war on Iraq has shaken up the MidEast and may open the door to new opportunities for negotiations.

A hardliner who played a key role in building Jewish settlements in the West Bank and Gaza Strip, Sharon outlined his reservations with the so-called US-backed road map to Palestinian statehood.