Beleaguered Israeli Prime Minister Ariel Sharon persisted with plans to form a new government including the main opposition Labour party, bolstered by Washington's backing for the expansion of West Bank settlements.
Sharon was humiliated by his right-wing Likud party last week when members voted down his motion to invite Labour into government -- a move seen as vital to gain a parliamentary majority for his plans to pull troops and settlers out of the Gaza Strip next year.
But in a letter to Labour leader Shimon Peres, Sharon made clear he is determined to include his party in a new coalition despite the Likud vote.
"I am determined to implement the disengagement plan and to enlarge the government to include the Labour party," Sharon wrote in the letter published Sunday by the Yediot Aharonot daily.
Currently on holiday at his ranch in the southern Negev desert, Sharon lost his majority in the 120-seat Knesset in June when traditional right-wing supporters deserted him over what they see as the "forcible transfer of Jews."
His decision to approve construction of 1,000 new homes in the West Bank on the eve of last week's Likud vote, was widely interpreted as a bid to placate opponents of his disengagement plan, says Channel News Asia.
According to BBC News, Palestinian officials have reacted angrily to reports the US is willing to accept some Jewish settlement building in the West Bank and Gaza.
The New York Times newspaper quoted a US official as saying there was a "covert" shift towards accepting "natural growth" within settlements.
Palestinian Prime Minister Ahmed Qurei said such a move would destroy hopes for peace. All settlement activity is prohibited under the US-backed roadmap peace plan. Settlements are considered illegal under international law, though Israel disputes this.
While calling on Israel to stop settlement construction and remove outposts, the road map also requires the Palestinians to dismantle militant groups responsible for attacks against Israelis. Neither side carried out its commitments, and the plan is frozen.
Also Sunday, several thousand Palestinians rallied in Gaza to back Palestinian prisoners, who have been on hunger strike in Israeli jails for a week, demanding better conditions, informs ABC News.
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