Sharon denies bribery scandal link

Israel's Ariel Sharon told police yesterday he knew nothing of dealings his son had with a man charged in a bribery scandal that cast a shadow over the prime minister's plans to uproot Jewish settlements from Gaza.

Sources close to the inquiry said the prime minister told investigators he was unaware of his son Gilad's deals with an Israeli businessman friend charged with trying to bribe Mr Sharon when he was foreign minister in the 1990s.

Police questioned Mr Sharon for two-and-a-half hours at his official Jerusalem residence.

"Sharon told the police he was not aware of Gilad's employment as an adviser to (developer) David Appel, and gave no new information about the case," a source close to the inquiry told Reuters.

"The police investigation will wind up soon and the attorney general will make a final decision on the case in two months."

A senior police source said earlier Mr Sharon had cooperated fully and there were no immediate plans to question him again.

Analysts say Mr Sharon would probably be forced from office if he were indicted.

Some critics have suggested the prime minister's shock announcement this week of a plan to move settlers from the Gaza Strip might aim to divert attention from the scandal - a notion the prime minister, a champion of settlement-building, denied.

Commentators said the case could weaken Mr Sharon's hand in any talks with the Palestinians on reviving a US-backed peace "road map" stalled by violence, or alternatively in garnering support in Israel for unilateral moves if the plan collapses.

On Wednesday, Mr Sharon said he was prepared to hold a referendum before carrying out his plans to dismantle 17 of the 21 Jewish enclaves in the Gaza Strip, where 7,500 Jews live among 1.3 million Palestinians.

Polls show most Israelis favour scrapping enclaves exposed to a Palestinian uprising, both in Gaza and the West Bank, where Sharon plans to leave most settlements alone.

Prosecutors said Mr Appel hired Gilad Sharon in 1999 and paid him large sums to persuade his father, then foreign minister, to promote real estate deals including a Greek island resort that was never built.

The January indictment against Mr Appel, who has denied the charges, did not cite any evidence that Mr Sharon knowingly accepted money to grant political favours. Mr Sharon, who last met investigators in October, has also denied any wrongdoing.