JERUSALEM, Dec 17: Israel's opposition Labour party has clinched a deal with Prime Minister Ariel Sharon's Likud party to join his coalition, a move that could push forward his Gaza pullout plan.

Party representatives are expected to sign the deal on Saturday, after a week of heavy negotiations. "Let's close (the deal) for a unity government," Channel 2 television reported Mr Peres as telling Mr Sharon by telephone.

Mr Sharon needs Labour to avoid an early election after his big coalition partner, the centrist Shinui party, bolted over a state budget dispute. Mr Peres has said Labour should join forces with Ariel Sharon to push forward a plan to "disengage" from conflict with the Palestinians by evacuating all 21 Jewish settlements in Gaza and four of 120 in the West Bank next year. -Reuters