Sharon will push ahead with his plan

Aides close to embattled Israeli Prime Minister Ariel Sharon say he will press ahead with his plans for a new coalition and withdrawal from the Gaza Strip despite a damaging defeat at the hands of his own party.

On Wednesday night, the Likud party's central committee rebuffed its more moderate leadership with 58 per cent voting to reject Mr Sharon's proposed coalition with the Labour Party, reports The Age.

A Likud convention voted overwhelmingly late Wednesday to bar Sharon from inviting the opposition Labor Party into the government.

Although Sharon insisted the vote wasn't binding, it could endanger the pullout, which he hopes to complete next year. Sharon is courting Labor to shore up support in parliament for the withdrawal plan.

Meanwhile, Palestinian leader Yasser Arafat rebuffed the latest challenge to his authority, refusing to sign anti-corruption legislation demanded by lawmakers.

In a speech to parliament, Arafat admitted Wednesday to making "mistakes" and pledged to clean up the Palestinian Authority, wrote ABC News.

And a newly assertive Palestinian young guard is challenging not only a corrupt entourage around Yasser Arafat but also the leader of the Palestinian national movement himself.

Unfortunately, such optimism is based on a complete misreading of both Israeli and Palestinian realities. Sharon is not about to agree to the most minimal conditions for viable Palestinian statehood.

His unshakable resolve to avoid dealing with the Palestinians - even to prevent chaos in the wake of the promised withdrawal from Gaza - and to widen Jewish settlement activity throughout the West Bank gives the lie to such wishful thinking, states The International Herald Tribune.