Buoyed by the dropping of a bribery case against him, Israel's Ariel Sharon is preparing to invite the opposition Labour Party into his government to pursue his Gaza withdrawal plan, political sources said on Wednesday.
Aides said the prime minister was breathing easier a day after Israel's attorney-general closed a long-running corruption investigation that had threatened to topple him and derail his plan for "disengaging" from conflict with Palestinians.
Political sources said Sharon and Shimon Peres, head of the centre-left Labour Party, had agreed to meet early next week to discuss prospects for joining his ruling coalition, which has been hit by far-right defections over his Gaza plan.
Labour, a supporter of withdrawals from occupied land, had been reluctant to throw the right-wing prime minister a lifeline while the bribery case loomed over his political future. With Labour on board, Sharon would restore his parliamentary majority.
That would give new impetus to Sharon's blueprint for removing all 21 Jewish settlements in Gaza and four of 120 in the West Bank by the end of 2005 - a plan opposed by hard-liners but backed by a majority of Israelis.
"If Labour joins, it will give a big boost to Sharon's disengagement strategy," a Sharon confidant said, predicting it would take weeks to work out terms for a "unity" government.
The groundwork was laid when Peres, a veteran peacemaker, called Sharon to congratulate him on Attorney-General Menachem Mazuz's finding on Tuesday that there was insufficient evidence to indict the prime minister.
Peres, who could expect to hold a senior portfolio such as foreign minister in any coalition with Sharon's rightist Likud party, signalled he was open to negotiations.
"Labour has one consideration - what will bring peace closer and advance evacuation of Gaza," Peres told Israel Radio.
But several key figures in both parties have vowed to fight against a Likud-Labour coalition. The parties teamed up in an uneasy alliance in Sharon's first term from 2001 to 2003, but it collapsed in a dispute over settlement funding.
Investigators had spent months looking into the payment of hundreds of thousands of dollars to Sharon's son Gilad by Israeli land developer David Appel, who hired him in the late 1990s to help plan a Greek island resort that was never built.
They probed whether Sharon, foreign minister when his son was given the job, used his position to promote the project.
"This absence of proof is...a deafening silence," Mazuz said, insisting he treated Sharon no differently from any other suspect. Sharon had denied misconduct. But an anti-corruption watchdog, the Movement for Quality Government, asked the High Court to overturn Mazuz's decision, saying he gave Sharon favourable treatment when he went against the chief prosecutor's recommendation to charge him.
Army Radio quoted judicial sources saying the court was not likely to intervene. Sharon still faces two other corruption probes, although the inquiries could drag on for up to two years.
Sharon's immediate challenge is to ensure his political survival following right-wing defections that erased his parliamentary majority after the cabinet approved the Gaza plan in principle on June 6.
Under a compromise, no settlement evacuations can begin until a further ministerial vote is taken in nine months.
Palestinians welcome any withdrawal, but they see Sharon's plan as an attempt to trade impoverished Gaza for a permanent hold on large swathes of the West Bank where most of the 240,000 settlers live, thereby depriving them of a viable state.