Political sources, confirming a compromise with the three Likud dissenters led by Benjamin Netanyahu, said on Saturday the mediator, Immigration Minister Tzipi Livni, was still trying to win over a key coalition partner, the National Religious Party.
Under the deal, the cabinet would approve the Gaza plan "in principle" on Sunday while agreeing to hold off on any evacuation of Jewish settlements until a second ministerial vote in six to nine months, the sources said.
On Friday, Sharon fired two ministers belonging to the far-right National Union, ensuring at least an 11-10 vote in favour of his US-backed proposal to remove all 21 settlements in occupied Gaza and four of the 120 in occupied West Bank.
But state funding for settlements slated for evacuation remained a key stumbling block in keeping the pro-settler National Religious Party in the government.
If the NRP abandons Sharon, his coalition would control only 55 parliamentary seats in the 120-member parliament, opening the way for a possible unity government with the main opposition Labour Party, which has 19 legislators, or new elections.
There are 7500 Jewish settlers
living in the occupied Gaza strip
"The compromise says the government will continue to transfer money to settlements due to be evacuated only in cases of dire need of additional infrastructure, such as fixing a broken pipe," one political source said.
"There would be no funding for new expansion or new projects." Efforts were under way late on Saturday to persuade the NRP to agree to the limitations and the establishment of a committee that would decide whether to allocate funds to the 25 settlements in specific cases.
Hide and seek
The three Likud dissenters, Finance Minister Netanyahu, Foreign Minister Silvan Shalom and Education Minister Limor Livnat, had urged Sharon to abide by a 2 May party vote rejecting his plan to "disengage" from the Palestinians.
Lacking a cabinet majority, Sharon was forced to postpone a ministerial vote on the plan a week ago. Opponents of a Gaza pullout, which Sharon wants to complete by the end of 2005, say it would reward Palestinian "terrorism".
"The compromise says the government will continue to transfer money to settlements due to be evacuated only in cases of dire need of additional infrastructure, such as fixing a broken pipe"
Palestinians fear a Gaza withdrawal masks Israeli plans to hold on permanently to large areas of occupied land in the West Bank.
Opinion polls show a majority of Israelis support removing the 7500 Jews who live in hard-to-defend settlements in the Gaza Strip, home to 1.3 million Palestinians.
Moving against National Union ministers Benjamin Elon and Avigdor Lieberman, Sharon summoned them to his office on Friday and then sent messengers to deliver dismissal letters after they failed to show up.
Tourism Minister Elon opted for hide-and-seek. In a bizarre twist, he said he wanted to avoid receiving official notice of dismissal - which under Israeli law goes into effect 48 hours later - so he would still be eligible to vote on Sunday.
But Channel One television said Israel's attorney-general determined Elon had indeed been fired and Sunday's cabinet meeting would be held, albeit two hours later than usual, at the end of the 48-hour cooling off period.
Meanwhile, thousands of people gathered outside the residence of Sharon late on Saturday in a mass demonstration calling for an immediate Israeli withdrawal from Gaza, Israel army radio reported.
Carrying banners reading "Get out of Gaza, start talking", the demonstrators marched from Zion Square in the city centre to Sharon's residence in the upscale Rehavia neighbourhood.
The majority of Israelis support
the pullout plan
The rally comes just 24 hours ahead of a crucial cabinet vote on the controversial pullout.
"The demonstration is to demand that the question of Gaza is not only for the members of (the right-wing) Likud to decide upon, but an issue that touches all the general public - of which the majority support a withdrawal," anti-settlement group Peace Now said in a statement issued several days before the rally.
The organisers said they were hoping to build on the success of a similar rally in Tel Aviv last month that was attended by some 150,000 people.