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The price of the Gaza pullout is still increasing, and is expected to have a significant effect on the 2007 budget.

Prime Minister's Office Director General Raanan Dinur and MK Avigdor Itzchaky (Kadima) are close to reaching a compromise on a bill Itzchaky initiated with MK Uri Ariel (National Union-National Religious Party) on increasing compensation for Gaza evacuees.

The compromise is expected to increase the cost of withdrawal by NIS 300 to 800 million, most of which would be borne by the 2007 budget. As a result, the budget would be cut later this year.

Assuming the parties compromise, the cost of compensation for Gaza evacuees will increase by about a half a billion shekels, totaling NIS 9.5 billion for 1,800 families.

A few months ago, Itzchaky and Ariel submitted a bill that would significantly increase the compensation offered through the Evacuation Compensation Law.

In its original wording, the bill carried a price tag of NIS 3-7 billion, making it the most costly private bill in history. As a result, Dinur stepped in to negotiate with the MKs, softening the bill and reducing its costs.

The discussions yielded the desired results, and articles to which Dinur raised objections, due to their questionable legality (compensation for illegal construction) and public implications, such as the demand for $200,000 for residential compensation to renters in Gaza, were dropped. But Dinur did agree to approve articles whose ramifications are solely budgetary, such as financing rent for Gaza evacuees for a third year.

Dinur apparently suggested the state make use of the exceptions committees established under the Evacuation Compensation Law in order to enable increased compensation without additional legislation.

The committees will be given permission to increase their spending by NIS 300 to 400 million. Itzchaky, however, is demanding an additional NIS 700 to 800 million.