Bribery case against Israel's Sharon dropped says TV

10.00am

JERUSALEM - Israel's attorney-general has decided not to indict Prime Minister Ariel Sharon on bribery charges, Israeli television said on Sunday, signalling the end of a scandal overshadowing his landmark Gaza pullback plan.

Israeli officials were not available for comment on the Channel Ten report that Attorney-General Menachem Mazuz had closed the case due to lack of evidence against Sharon. Mazuz is expected to issue his formal decision some time this week.

Indictment would likely force Sharon from office and derail his strategy of "disengagement" from the Palestinians, which the cabinet approved in principle last week in a vote that enraged his pro-settler partners and triggered a coalition crisis.

But removal of the indictment threat would give Sharon a boost in scrapping all 21 Jewish settlements in the Gaza Strip and four of the 120 in the West Bank by the end of 2005 -- a move he casts as breaking a deadlock in 3 1/2 years of conflict.

The plan has popular backing in Israel. Sources in Sharon's office said on Sunday that dozens of settlers had asked for details of compensation for leaving their homes voluntarily.

The bribery case centres on payments of hundreds of thousands of dollars that an Israeli land developer was said to have made to Sharon's son Gilad, hired in the late 1990s as an adviser on a never-completed project to build a Greek resort.

The developer, David Appel, was indicted in January on charges of trying to bribe Sharon. Israel's chief prosecutor has officially recommended indicting the prime minister as well.

Sharon also faces probes in two other corruption scandals.

An end to the so-called "Greek island affair" could ease the entry of the opposition Labour Party into government to shore up a coalition hit by far-right defections that have stripped it of a majority in the 120-seat parliament.

A senior government official said last week Sharon was all but certain to bring in centre-left Labour, a supporter of withdrawals from occupied land which has been reluctant to throw him a lifeline while the corruption scandal lingers on.

"The government...will eventually have to bring in Labour," the official said. But he declined to give a timetable.

If the disengagement plan is carried out, it would mark the first time Israel has removed settlements built in the West Bank and Gaza, which were occupied in the 1967 Middle East war. The Palestinians would welcome any withdrawal from territories they want for a state, but regards the unilateral plan as a ploy to cement Israel's hold on West Bank land.

On Sunday, Sharon told the cabinet he intended to make sure the pullout kept to its timetable. "I told those in charge of the committees to start work without delay," he said.

Israel plans to pay an average of $300,000 per family in compensation to settlers who leave voluntarily, government officials said on Friday. The sum would be enough to buy a one-family house or large apartment in many Israeli towns.

Settler interest in the compensation offer, just a week after the plan was approved, was the first indication that at least some would leave willingly despite insistence by their rightist leaders that buying them out was not an option.

- REUTERS