If Sharon fails in parliament, he will have to face a snap election that would threaten his plan to pull out of Gaza.

   

The Israeli parliament's finance committee on Wednesday voted 10-9 in favour of the 2005 budget, sending the package to the full legislature where Sharon faces a tough battle for final approval next week against ultra-nationalists opposed to ceding an inch of occupied land.

   

In another sign of rightist opposition, a second Knesset panel decided to let parliament rule on whether to hold a referendum on a Gaza pullout.

 

Sharon rejects the idea as a delaying tactic, and lawmakers are expected to vote it down.

 

General election

 

By law, if the 264.5 billion shekel ($62 billion) budget is not passed by 31 March, a general election must be held in late June, a month before the Gaza withdrawal is due to begin.

Ultra-nationalists oppose ceding
occupied land to the Palestinians

   

An early national ballot could put Sharon's "Disengagement Plan" on hold - or possibly lead to it being shelved altogether - while complicating any new peace moves with the Palestinians.

   

As Sharon scrambles for legislative support from opposition parties, he is counting on broad public backing for his Gaza plan as well as Israeli distaste for the idea of holding a third national election in four years.

   

"I don't foresee elections because this budget will pass," Finance Minister Benjamin Netanyahu told Israel Radio.

 

A Gaza pullout would mark Israel's first removal of illegal settlements from Palestinian land.

 

UN investigator's call

   

Meanwhile, in Geneva, a United Nations human rights investigator on Wednesday called on Israel to take a "bold step" towards securing peace by meeting Palestinian demands to release thousands of prisoners.

   

"What is required of Israel is a bold step, of the kind taken by other transitional societies, which have released prisoners in order to further peace"

John Dugard,
UN special rapporteur

John Dugard, UN special rapporteur on human rights in the Palestinian territories, also urged the Jewish state to stop building new settlements in the West Bank.

   

Dugard, who visited the territories and Israel last month, spoke to reporters a day after addressing the annual UN Commission on Human Rights.

   

Dugard said he recognised "important moves in the right direction" by Israel, including the recent release of 500 Palestinian prisoners and a decision to disengage from the Gaza Strip.

   

But Israel had been "timid" in its approach to demands for the release of 7,000 Palestinian prisoners in Israeli jails, a "top priority" for the Palestinian Authority, he told reporters.

   

"What is required of Israel is a bold step, of the kind taken by other transitional societies, which have released prisoners in order to further peace," Dugard said.