March 27, 2003	Thursday	Muharram 23, 1424

AL QUDS, March 26: Israel has passed sweeping budget cuts to try to whip its ailing economy back into shape, while in the territories a lull in violence since the launch of the US-led war in Iraq ended with the killing of five Palestinians, two of them children.

The government adopted the belt-tightening plan proposed by Finance Minister Benjamin Netanyahu by a large majority in a meeting late Tuesday.

Of the 23 ministers in the cabinet, 21 backed the plan for swinging cuts in the public sector which will whittle away 11.4 billion shekels (2.3 billion dollars) from the budget, running a record 30-billion-shekel deficit (6.4 billion dollars).

The two ministers who rejected the plan were from the National Religious Party (NRP), the mouthpiece of controversial Jewish settlers in the occupied Palestinian territories.

“This plan is painful and the situation is not easy, but the plan is necessary. Given the current economic and security realities, we have to take drastic measures to preserve Israel’s market balance and allow an economic relaunch,” Prime Minister Ariel Sharon said.

The drastic plan, aimed at pulling Israel out of its worst ever economic crisis, still has to be approved by parliament. The first reading is scheduled for April 14-15.

The economy has been hit by a global downturn in the key hi-tech sector and by the cost of 30 months of conflict with the Palestinians, seeking to end Israel’s occupation in the West Bank and Gaza Strip.

The plan by Netanyahu, a sworn free-marketeer, aims to cut up to 10 percent in public sector spending, dismiss some 10,000 civil servants and slash social payments, press reports said.

It risks however running into fierce opposition from unions, with the central syndicate threatening a general strike in protest.

As Israel battled its economic woes, the army kept up the pressure in the West Bank, which it has reoccupied since a spate of suicide bombings last June, hunting down militants but also killing scores of civilians in rioting in city streets.

On Tuesday, Israeli forces opened fire in the southern town of Bethlehem, killing a 10-year-old girl and a 28-year-old man, Palestinian medical and security sources said.

The shooting apparently targeted two members of the radical Islamic group Hamas, who relatives said were killed in the clash. The families said they Israeli army had kept the men’s bodies.

The Israeli army refused to confirm the Hamas militants’ deaths and said it was investigating.

Earlier in the day, in the northern town of Jenin, Israeli forces fired on a crowd of youths throwing stones at armoured vehicles enforcing a ceasefire. One 12-year-old boy was killed. Another teenager was shot dead the day before.

The violence has ruptured a lull that set in with the start of the Iraq war, with Israel on full alert for a possible Iraqi Scud attack and the Palestinians fearing the Israeli army could step up operations while world attention is focused on Iraq.

The Palestinians are also calling for the swift publication of an internationally drafted peace “roadmap” which sets out the stages to creating an independent Palestinian state by the year 2005.

US President George W. Bush promised to publish the document after Palestinian leader Yasser Arafat appointed his moderate PLO deputy Mahmud Abbas as prime minister.—AFP