Coalition deal faces delay over Peres role

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The formation of Ariel Sharon's new "unity" coalition with the opposition Labour Party was threatened with delay last night after an unexpected hitch.

Legislation needed to install the veteran Labour leader Shimon Peres as a second deputy Prime Minister was stalled after the chairman of the backbench Knesset Constitution Law and Justice Committee refused to rush it through.

Under a deal struck at the weekend, Labour secured eight ministerial posts in the coalition formed by Mr Sharon, the Israeli Prime Minister, to ensure passage of his plan to "disengage" from Gaza. Mr Peres will become a second deputy Prime Minister after the refusal of Ehud Olmert, Mr Sharon's present deputy, to stand down.

But Michael Eitan, the Likud Knesset member who chairs the committee, said he would not rush amendment of the basic law governing ministerial appointments for fear of bungling constitutional change. Labour has refused to sign the deal until all the ministerial posts are in place.

The development follows an acrimonious wrangle over portfolios and economic policy during the coalition negotiations, which ended on Saturday.

A ministerial committee approved yesterday the release of 170 Palestinian prisoners in what Mr Sharon called a "goodwill" gesture to the Egyptian President, Hosni Mubarak, in return for the release two weeks ago of Azzam Azzam, the Israeli citizen who had served eight years in an Egyptian jail on spying charges.

The panel, headed by Mr Sharon, agreed to release 120 Fatah activists and 50 Palestinians arrested in Israel without legal entry permits, in a move that officials indicated was also intended to help the election of Mahmoud Abbas in the 9 January poll to find a successor to Yasser Arafat.

The UN said that an Israeli army operation in the southern Gaza town of Khan Yunis which left 11 Palestinians dead had destroyed 39 houses. The operation was launched to stop mortar and rocket attacks on Israeli settlements, in which one person had been killed and 17 wounded.

* Mairead Corrigan Maguire, the Nobel Peace Prize laureate, compared Israel's nuclear arsenal to the Nazi's gas chambers yesterday. She said at a news conference calling on Israel to lift travel restrictions on the nuclear whistle-blower Mordechai Vanunu: "Nuclear weapons are only gas chambers perfected."