Predicting a year of opportunity for peace talks, Israeli Prime Minister Ariel Sharon held out the prospect of an independent state for the Palestinians if they stop violence against Israel, but Palestinian officials dismissed the gesture as nothing new.
Speaking at an annual academic conference, Sharon's speech on Thursday evening was conciliatory and optimistic, a sign of the changing atmosphere in the post-Yasser Arafat era.
In step with those changes, Sharon indicated for the first time in public that he wanted to coordinate his "disengagement plan" with the Palestinians, an about-face from his initial proposal to "unilaterally" pull out of all Gaza Strip and four West Bank settlements next year.
"In light of the new opportunities and potential of a new Palestinian leadership, Israel will be prepared to coordinate various elements relating to our disengagement plan with the future Palestinian government -- a government which is ready and able to take responsibility for the areas which we leave," Sharon said.
But violence still raged in Gaza yesterday.
After 11 Israeli soldiers were slightly wounded in a Palestinian mortar attack, Israel sent tanks and bulldozers into the Khan Younis refugee camp early yesterday to knock down buildings used as cover by militants, the military said.
Two Palestinians, including one gunman, were killed and eight people were wounded in the fighting.
Hundreds of Palestinians fled their homes for fear the army would demolish them. The families sought refuge in a nearby hospital, a stadium and at the homes of relatives who don't live on the frontline of fighting.
A few hours earlier, an Israeli helicopter fired a missile at a carpentry shop in the Rafah camp, which the army said was used to manufacture mortars.
Charging that Arafat was the main obstacle to peace, Sharon called 2005 "the year of the great opportunity."
Sharon said his planned withdrawal from Gaza and a part of the West Bank could lead to peace negotiations.Acknowledging that the pullout proposal has caused him political difficulties, forcing him to reform his government, he defended his plan.
"To do this, we have to take the initiative," he said. "This is the hour, this is the time, this is the national test."
Palestinian reaction to the speech was dismissive.
Palestinian Cabinet minister Saeb Erekat, who is in charge of negotiations with Israel, said the speech contained nothing new.
"If he wants to withdraw from Gaza or anywhere else, no one will stop him. but as far as permanent settlement issues, this is dictation," he said.