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Israel's parliament, in a preliminary reading, passed a bill Wednesday that would grant tax benefits to Israeli residents of the Golan Heights if it passes.

Some 67 of the 120 lawmakers in the Knesset voted for the bill, while 13 voted against, Israel Radio reported. The rest abstained or were absent.

The private bill, initiated by lawmaker Eli Aflalo of the opposition Kadima party, must pass three more readings before it becomes law.

"The Golan is an inseperable part of Israel and there is no reason that Golan residents should not receive the same tax benefits that other residents of the periphery receive," Aflalo said.

Under the bill, 33 Israeli communities on the Golan - the strategic plateau which Israel captured from Syria in the 1967 Six-Day war - would be added to a list of towns which receive tax benefits amounting to 13 per cent. The move would cost Israel 35 million shekels annually in tax revenue.

Kadima leader Tzipi Livni and a few other members of her party voted against the law, which they charged was "poorly" timed because of a recent verbal clash with Syria, and which they warned could further raise tensions with Israel's north-eastern neighbour.

In a recent exchange of threats, Damascus had hinted that if attacked by Israel, it would lash out at Israeli cities. Foreign minister Avigdor Lieberman of the coalition Israel Beiteinu party then replied that if Syrian President Bashar Assad dared to attack Israel, he should know that "neither he nor the Assad family will remain in power."

Livni's Kadima rival, Shaul Mofaz, and his supporters voted for the bill in an explicit display of the split within the opposition party. The hawkish Mofaz, a former army chief of staff and defence minister, is vying for the party leadership.

Livni's spokesman had earlier issued a statement, accusing the government of Prime Minister Benjamin Netanyahu, of the Likud party, of "playing with fire" for turning down a request to postpone voting by several weeks until tensions with Syria had calmed.

One Likud lawmaker, Ofir Akonis, in turn accused Livni of turning her centrist Kadima party into a left-wing one and of following an "extremist line" by voting against the bill.

Legislator Haim Oron, of the left-liberal Meretz party, also slammed the bill, which he said failed to include also the Druze villages on the Golan.