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Labor Party Chairman and Defense Minister Ehud Barak yesterday told the cabinet in its weekly meeting that his party will sponsor a bill to enable settlers living east of the separation barrier in the West Bank to be compensated for voluntarily leaving their homes.

Officials in Barak's office said the move was the beginning of a long process that will include deliberations and approval by the cabinet. Sources in the Prime Minister's Office, however, said there is no plan to submit the issue for discussion in the near future.

The draft law, "the voluntary evacuation-compensation law," is based on a private members' bill submitted previously by MKs Avshalom Vilan (Meretz) and Labor MKs Colette Avital and Ami Ayalon. The Ministerial Committee on Legislation rejected their bill about two months ago.

Prime Minister Ehud Olmert told Barak in yesterday's cabinet meeting that the matter deserves to be reviewed. Haaretz has learned that Olmert told a few ministers in recent weeks that he is in favor of the idea, but fears for the future of his coalition.

About 65,000 settlers live east of the current and planned route of the separation fence.

Barak's associates said that the bill, if passed, could prevent violent confrontations during future evacuations. They said the moment the state put up the separation fence, the state in effect marked the Jewish communities beyond it for evacuation in any future arrangement with the Palestinians.

In response to the initiative, the Gush Katif Committee issued a statement that said Barak is "fleeing from coming to terms with, instead of helping to solve the problems of, the residents of Gush Katif who were evicted in accordance with the evacuation and compensation law and for whom an appropriate housing solution has still not been found. Barak is attempting to create additional humanitarian disasters of evacuees."

On the evacuation of illegal outposts in the West Bank, Barak told the cabinet that talks are underway aimed at reaching an understanding with the settlers, "but the duty of the government in a law-abiding state is to carry out its resolutions and to honor the law."

Barak's statements provoked strong reactions from the right of the political spectrum. The Yesha Council of Jewish Settlements issued an announcement stating that "Barak apparently doesn't understand that the public in Judea and Samaria will not trade on its principles and will not sell its loyalty to Eretz Yisrael in exchange for bribes and money. The minister would be well advised to deal with solving Israel's real security problems - the Qassam rockets and the Iranian threat - instead of dealing with driving Jews out of their homes."

The head of the Samaria Regional Council, Gershon Mesika, said Barak is mistaken if he thinks people will leave their homes in exchange for money. Mesika's counterpart in the Jordan Valley, Dubi Tal, said people in his area are not treating Barak's proposal seriously.

"We expect the defense minister to strengthen the Jordan Valley, not to starve it out. The people here have put their souls and money into farming. They're not the kind of people you can give a check to and send away," Tal said.

MK Uri Ariel, the whip of the National Union-National Religious Party, said that if Labor submits Barak's draft bill, he intends to submit a draft evacuation and compensation bill for Arabs to encourage them to return to their countries of origin.

MK Zvi Hendel (NU-NRP), himself a Gush Katif evacuee, called on Barak to concentrate on security matters. He suggested, sarcastically, that the evacuation and compensation law begin with the residents of Sderot, Ashkelon and other Negev communities subject to Qassam rocket barrages, and perhaps also Kiryat Shmona and nearby communities, which are threatened by Hezbollah.

Ariel and Hendel's party colleague, MK Arieh Eldad, echoed Hendel's suggestion, calling facetiously for Barak to sponsor an evacuation-compensation bill for Sderot's residents. "The government and the military system for which Barak is responsible and which is failing to do its job should also compensate every citizen of Israel who wants to leave his home as a result of the government's failures."