The Knesset, rejecting three no-confidence motions in Sharon's shrunken coalition on Monday, also approved his choice of hawkish former army chief Shaul Mofaz as defense minister.

Losing the no-confidence votes would have forced Sharon into an early general election. He can now press on with efforts to enlist ultra nationalist parties into the right-wing government he hopes to form after the collapse of his broad coalition.

Israel was plunged into political crisis last week when the center-left Labour Party bolted from Sharon's "national unity government" in a dispute over funding for Jewish settlements on occupied lands where Palestinians want to establish their state.

In an interview published on Tuesday in Britain's Times newspaper, Sharon said he planned to remain in power and lead Israel to peace through "painful compromises."

"I believe I will have to lead this nation for several years to give answers and solutions to the issue of security, the issue of the political process, the economy," he said.

Palestinians have expressed alarm that an Israeli government dominated by right-wing nationalists would be ideologically opposed to a Palestinian state and would use harsher methods to crush their two-year-old uprising in the West Bank and Gaza Strip.

How Israel responds to Monday's suicide bombing could give Washington an answer as to whether a government without Labour's moderates would avoid, as Sharon has promised, any action that could damage US efforts to win Arab support for possible war on Iraq.

CLAIM OF RESPONSIBILITY FOR BOMBING

The London-based Al-Quds al-Arabi newspaper said it had received a claim of responsibility from the Al-Quds Brigade of the militant Palestinian group Islamic Jihad for the bombing at the Arim shopping mall in the central Israeli city of Kfar Saba.

"There are two bodies of innocent victims, and the suicide bomber," police spokesman Gil Kleiman said. More than 30 people were wounded.

In a sign of how routine suicide attacks have become during the Palestinian uprising, the Israeli parliament continued its Monday session uninterrupted.

Earlier, a Palestinian Hamas militant and another person were killed in an explosion in a car in the West Bank city of Nablus that Palestinian officials blamed on Israel.

In the Gaza Strip, Israeli forces killed five Palestinians in incidents near volatile border areas. Palestinians said the dead were civilians. The army said the five men were armed.

At least 1,645 Palestinians and 623 Israelis have been killed since the Palestinian revolt began in September 2000 after peace talks focusing on a Palestinian state foundered.

Raanan Gissin, a Sharon spokesman, said Israel would not give up its fight against militants.

"It is regrettable that once again the terrorists misconstrue, miscalculate the strength of Israel democracy because while we are engaged in a democratic process of trying to form a new government we are not going to give up the relentless fight against terrorists," Gissin told Reuters.

As was widely expected, Sharon -- who now controls 55 seats in the 120-member parliament -- defeated the no-confidence motions with the help of the opposition ultra nationalist National Union-Yisrael Beitenu party.

The party, which Sharon is courting for his coalition, abstained in the Knesset voting. This denied the prime minister's opponents the 61 votes necessary to force elections before October 2003, when they are due by law.

But the far-right party's support for Sharon could be short-lived and conditional on the success of coalition negotiations. Pressure has been building in parliament to hold a vote some time between February and May.

(China Daily November 5, 2002)