JERUSALEM, July 13: Israel's Labour Party on Tuesday approved the start of formal negotiations with Prime Minister Ariel Sharon to forge a unity government to push through his Gaza pullout plan, political sources said.

The right-wing prime minister made overtures to centre-left Labour after losing his parliamentary majority last month when far-right allies defected over his blueprint for removing troops and Jewish settlers from Gaza by the end of 2005.

Labour's terms are likely to include a swifter pullout and direct talks with Palestinians, who fear unilateral 'disengagement' may give them back tiny Gaza only to deprive them of large swathes of the West Bank for a future state.

The vote by Labour's leadership came a day after Sharon won agreement from Labour leader Shimon Peres to pursue coalition talks. Political insiders say negotiations are likely to be protracted. -Reuters