JERUSALEM, 10 November 2004 — The political mouthpiece of the settler movement resigned from Ariel Sharon’s coalition government yesterday after the Israeli prime minister refused to bow to demands to put his Gaza pullout plan to a national referendum.

“I offered my letter of resignation as planned,” Welfare Minister Zeev Orlev told Israeli television.

Earlier in the day, Orlev laid out the reasons for his resignation and for the departure of his National Religious Party from the coalition at a press conference in Jerusalem.

“We said, if there is a referendum, we will stay in government whatever the result, even if we lose the referendum,” he said, acknowledging that the option had been rejected by Sharon.

The NRP, one of three parties still in government, had set Sharon a two-week deadline to either call new elections or a referendum on his so-called disengagement plan after it won parliamentary approval a fortnight ago.

But the premier refused to comply, insisting that there was no time for a plebiscite and warning that calls for a referendum were merely a smokescreen used by opponents to wreck the whole project.

The withdrawal by the NRP, the traditional political mouthpiece of the settler movement, will increase the pressure on Sharon to find fresh coalition partners, as he lost his overall majority back in June after traditional allies were either sacked or quit in protest over the plan.

To date, Sharon has been kept afloat by the main opposition Labour Party but it has so far withheld support for the budget. The government was forced to postpone the budget vote last week when it became clear that it lacked a majority.

Finance Minister Benjamin Netanyahu had also given Sharon two weeks to call a referendum but he withdrew his threat yesterday, saying the “imminent death of (Palestinian leader) Yasser Arafat has changed the situation”.

Other Likud rebels have also backed down from the resignation ultimatum.

“The plan must be reviewed as it was based on the absence of a viable Palestinian partner,” Netanyahu said, hinting that the rules of the game could change with Arafat’s death, rendering Sharon’s disengagement plan irrelevant.

Amid swirling reports of Arafat’s death, Palestinian Foreign Minister Nabil Shaath said the veteran leader was still clinging to life in a French military hospital outside Paris.

Meanwhile, Yonatan Bassi, the head of the disengagement authority, voiced confidence that the pullout would go ahead relatively smoothly despite warnings by Sharon that hard-line opponents were trying to foment a civil war.

“I don’t think they will go against the government,” Bassi told the Jerusalem Post newspaper.

Bassi said that the 8,000 Jewish residents of Gaza, who are due to be uprooted from their homes next year, were much less confrontational than their counterparts in the West Bank, which is home to nearly 240,000 settlers.

“I think that the vast majority will go without a struggle. They’re rational people. Good people. People who want to support and raise their families in a community in which they feel comfortable,” he told the paper.

Sharon, for years seen as the ultimate champion of the settler movement, and Bassi have been the targets of death threats over the plan which will also see several hundred residents of four isolated settlements in the northern West Bank evacuated by September 2005.