Approximately 60 per cent of Likud’s central committee voted in favour of a new governing alliance with the centre-left Labour Party which Mr Sharon argued was necessary to avoid early elections and the derailing of his Gaza withdrawal plan.

Prime Minister Sharon is likely to open negotiations with Labour leader Shimon Peres this weekend.

Labour’s entry into government became vital after Sharon sacked the last remaining member of his coalition government, the secular Shinui party, after it voted against his 2005 state budget and extra funding to ultra-Orthodox Jews.

Two other coalition partners had earlier departed the government over their opposition to the Gaza pullout plan which the Prime Minister has insisted will be implemented at all costs.

This new alliance marks a turnaround for the Likud party’s central committee which ruled out an invitation in August to form a coalition unity with the Labour Party.

While many Likud members are uneasy about Labour’s entry into government, few have an appetite for early elections which are not otherwise due to take place until the end of 2006.

Mr Sharon is also likely to bring United Torah Judaism, a small ultra-Orthodox party, into government.

The plan to withdraw from Gaza, captured along with the West Bank in the 1967 Middle East war, enjoys broad support among Israelis. But opponents call it a “reward for terror.”

Nicknamed “The Bulldozer” for his aptitude at plowing through opposition, Mr Sharon has also been buoyed by fresh optimism that peace talks with the Palestinians might resume after a January 9 election for a successor to Yasser Arafat.

In a departure from his longstanding demand for a crackdown on Palestinian militants waging a four-year-old revolt, Mr Sharon said he might be willing to scale back Israeli army sweeps if militants halted attacks.

But violence flared on Wednesday when Israeli troops shot dead four Palestinians in southern Gaza. Military sources said the Palestinians were believed to be gunmen or arms smugglers.

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