In an interview with the daily Haaretz, Sharon said that after the "shock" that had rippled across the region with the US take-over of Baghdad, "there is therefore a chance to reach an agreement faster than people think."

"We face the possibility that a different period will begin here. The move carried out in Iraq generated a shock through the Middle East and it brings with it the prospect of great change," he told the newspaper.

In in his first major interview since the Iraq war began, Sharon also said: "one has to view things realistically."

"Eventually there will be a Palestinian state ... I do not think we have to rule over another people and run their lives."

Sharon refused to give details of whether he was planning to evacuate specific Jewish settlements in the occupied territories, but reiterated that he was ready to make "painful concessions."

"We are talking about the cradle of Jewish civilisation. Our whole history is bound up with these places. Bethlehem, Shiloh and Beit El," he said, referring to the re-occupied Palestinian self-rule town south of Jerusalem and two West Bank settlements.

"And I know we will have to part with some of these place. There will be a parting from places that are connected to the whole course of our history. As a Jew, this agonises me," he said.

Asked if he would be willing to evacuate the settlement of Netzarim, on the south edge of Gaza City, he said: "I don't want to go into a discussion of a specific place. This is a delicate subject and there is no need to talk a lot about it."

A senior government official played down speculation that Sharon was planning to evacuate the settlements of Shiloh and Beit El.

"The press is not paying proper attention to what Sharon has said in the past. He has always said he was willing to make painful concessions. He hasn't said anything new in this respect," the official, who asked not to be identified, told AFP.

"Four thousand years ago the Jews walked the hills of Judea and Samaria, that's where we started as a nation," he said, using the Israeli name for the West Bank.

"When (Sharon) talked about Shiloh and Beit El he was making the point that this is our ancestral home," he said.

"There is a possibility that when we have a real and durable peace and the Palestinians give up the right of return, then we'll we'll have to make painful concessions. They call it the right of return, I call it the right to destroy Israel as a Jewish state."

Palestinian leader Yasser Arafat's top aide Nabil Abu Rudeina gave Sharon's comments a cool response.

"What counts is that Sharon declares his agreement with the roadmap and start implementing it, starting with withdrawing from the Palestinian territories," he said, referring to the peace plan drawn up by the United States, the United Nations, the European Union and Russia.

"We will refuse any amendments and we have been informed by the quartet, and especially by the United States, that there would not be any amendments to the roadmap," he said.

"The United States and the quartet must exert enough efforts to force Israel to implement the roadmap, this is the real test."

The roadmap proposes the creation of a Palestinian state by 2005 alongside a secure Israel.

US President George W. Bush has said it will be published when newly-apppointed Palestinian prime minister Mahmud Abbas announces his government.

Abbas has another 10 days to do so, according to Palestinian law, but insiders said the government could be announced sooner.

Sharon has accepted the roadmap "in principle," although aides say he wants 15 amendments. Most of the points focus on the need for Palestinian security forces to crack down on hardline groups attacking Israelis.

His chief of staff Dov Weisglass left for Washington on Saturday night to present the Israeli reservations.

jlr-jh-sc/ben

SPACE.WIRE