TEL AVIV, June 12: Israel will demolish all 21 Jewish settlements in the Gaza Strip as part of a promised pullout from the territory, officials said on Saturday, going back on earlier plans to leave the homes intact.

"The houses will be destroyed so that they do not fall into the hands of terrorists or the mafia run by Yasser Arafat," said an official in the office of Prime Minister Ariel Sharon.

"It would have been otherwise, had we received assurances that these buildings would be turned over the Palestinian refugees, but, as this is not the case, we had no other choice," the official said, asking not to be further identified.

The announcement came as Ariel Sharon accelerated preparations to implement the withdrawal following its approval in principle by ministers last week, despite opposition from hardline members of both his party and his government.

There was no immediate reaction from the Palestinians.

After talks with the heads of Palestinian factions in Cairo, prime minister Ahmed Qorei reiterated that his security forces stood ready to take charge of any territory evacuated by Israel.

"We hope Israel will withdraw from all Palestinian territory and we agree to take responsibility for any area from which Israel withdraws," Mr Qorei told reporters after the meeting.

The Israeli official said Sharon had received a telephone call from UN Secretary General Kofi Annan assuring him of the "UN's support for the courageous plan to withdraw from the Gaza Strip."

The call followed expressions of support from the summit of the Group of Eight most industrialised nations in Sea Island, Georgia.

Sharon has rushed to draw up legislation enabling compensation payouts as early as this autumn to the 7,500 Gaza settlers earmarked for evacuation.

Another 1,000 settlers in four isolated outposts in the West Bank are also slated to lose their homes.

A bill on compensation is to be put to ministersfor approval by the end of next month, with a view to pushing it through parliament before the August recess, the Haaretz newspaper said on Friday.

Exact levels of compensation have yet to be determined, but reports say the average family could receive $300,000.-AFP