Netanyahu quits over Gaza withdrawal

ISRAELI Finance Minister Benjamin Netanyahu has resigned in protest over next week's withdrawal from the Gaza Strip and part of the West Bank.

He submitted his resignation during the weekly Cabinet meeting yesterday.

He said he agonised over his decision, as he wanted to continue what he called "historic" economic reforms - but felt he could no longer lend support to the plan.

After the Cabinet meeting, he said a Gaza pull-out is endangering Israel by creating a "base for Islamic terror" in Gaza.

He said such warnings by security officials were being ignored by the government.

Mr Netanyahu said his decision was unlikely to halt the withdrawal. But he complained the government was acting with "complete blindness."

"I cannot stop this (the pull-out), but I can be at peace with myself. I can say that I cannot be a party to this," he said.

Mr Netanyahu is a former prime minister and political hard-liner. He voted in favour of the pull-out in the Cabinet, but tried to torpedo the plan in parliament.

The finance minister is considered Prime Minister Ariel Sharon's biggest political rival within the ruling Likud Party. He is expected to challenge Mr Sharon for party leadership ahead of the next election.

Meanwhile, Mr Sharon yesterday denounced as an act of terrorism a Jewish extremist's shooting rampage that killed four Israeli Arabs, and warned that militants could strike again.

The gunman, a deserter from the army who opposed the withdrawal, killed people on a bus on Thursday before being bludgeoned to death by an angry crowd.

Palestinian militants have left a 10-year-old boy in critical condition after they shot him in the head. They had opened fire on an Israeli car near the West Bank settlement of Ateret north of Jerusalem. Two people were lightly injured.

Addressing the Cabinet, Mr Sharon complained of "terrible incitement" by Jewish extremists. "There is a danger that such an incident can occur again," he said, before the West Bank shooting.

The Cabinet was to give final approval later yesterday to the evacuation of three isolated settlements in Gaza - Netzarim, Morag and Kfar Darom. It is a first in a series of votes dismantling specific settlements, and widely seen as a chance for opponents to express their views one last time. Cabinet has already approved the withdrawal.

"It is a difficult, complex but very important process for Israel, but will be implemented as the Cabinet and the Knesset decided," Mr Sharon said.

Opponents of the pullout, scheduled to begin next Monday, have been trying to torpedo it, holding mass protests, smuggling sympathisers into the condemned settlements, and calling on soldiers to disobey orders to evacuate the settlements.