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Jewish settler Avi Farhan, determined not to give up his home overlooking the sea when Israel quits the occupied Gaza Strip, is looking into becoming a Palestinian.

"I have met with Palestinians. I am willing to be a test case for peace and take up Palestinian citizenship," Farhan told Reuters. "It will hurt me to give up my Israeli citizenship, but I want to remain here."

One Palestinian official suggested he might be allowed to stay in Gaza - home to 1.4 million Palestinians - as long as he obeyed Palestinian laws. Actual citizenship could only be decided on an individual basis and any applicant would have to meet the same conditions as anyone else.

Ordinary Gazans have long viewed the 8,500 settlers in the territory as bitter enemies living on land they want for a state.

Prime Minister Ariel Sharon plans to give up all 21 Jewish settlements in the Gaza Strip as well as four of 120 in the West Bank in what he bills "disengagement" from conflict with the Palestinians. Withdrawals start next month.

Farhan, a Libyan-born Jew who left Tripoli for Israel at the age of three in the wake of the 1948 war at Israel's creation, said seven families were willing to stay in the mostly secular Gaza settlement of Elei Sinai after Israeli troops leave.

Farhan, 59, helped establish Elei Sinai after being forced to leave the Sinai settlement of Yamit in 1982. Like the West Bank and Gaza, Israel captured Sinai in the 1967 war, but returned it to Egypt under a peace deal.

"I fled from Tripoli, endured the displacement camps in Israel, and then I was kicked out of Yamit. Today I won't be a refugee again. I have no strength," said Farhan, a restaurant owner. "The Israeli government says it is concerned for my security if I stay here. I will worry about my own safety."

A senior Israeli official dismissed Farhan's bid as a "gimmick" by settlers trying to save their homes.

He said settlers would not be safe in Gaza, where they currently come under frequent mortar and rocket fire, but did not say if Israel would prevent them staying on as Palestinians.

"Let's be realistic. They are currently under attack. What will happen to them when we are not there?" the official said.

Most settlers have pledged to remain in Gaza until they are evacuated, and few contemplate remaining afterward.

But a Palestinian official said they would be welcome.

"Unlike Zionism which is religiously exclusive, Palestinian nationalism is not," said Diana Butto. "So if these settlers wish to come in and be subject to Palestinian law, then of course we welcome them."

At least a fifth of the population of Israel is made up of Arabs, many of whom are Muslims and identify themselves as Palestinians. They have constitutional rights, but complain of institutionalised discrimination.

Palestinian and Israeli officials have already agreed to raze the settler homes to make way for high rise apartments.

Some other Elei Sinai settlers including Farhan's 25-year-old son Ofer and Yossi Berebi, said they were willing to take their chances and were not afraid of the Palestinians.

"If the state of Israel is ready to give me up, I am ready to give it up," said Berebi.

But Itzik Yamin, 51 and also from Elei Sinai, remained sceptical about a future for settlers in Gaza after the pullout.

"I think the hate is too deep to make it possible for us to live together," he said.