Jewish settler leaders urged their followers Monday to resist the evacuation of settlements in the Gaza Strip (search) and parts of the West Bank (search), signaling a shift toward revolt after settlers lost hope of stopping the pullback by political means.

The announcement came as parliament endorsed a reform bill that is expected to clear the way for the moderate opposition Labor Party (search) to join the government, which would stabilize Prime Minister Ariel Sharon's (search) coalition and guarantee strong political support for the Gaza withdrawal.

Also Monday, Israel backed out of a proposed Mideast peace conference in London, after earlier signaling it would attend.

For months, settler leaders had been confident they could stop the Gaza plan with political lobbying and bring down Sharon, if necessary. Last summer, the settlers' political patrons quit the coalition, weakening Sharon's government. Settlers also enjoyed strong support among many legislators in Sharon's Likud Party.

However, Sharon outmaneuvered his opponents, including those in Likud.

The call to disobedience was issued by Pinchas Wallerstein, a former leader of the Yesha Settlers' Council. Wallerstein sent letters around the West Bank, saying settlers should resist evacuation even if it means going to prison.

At a news conference, the council endorsed Wallerstein's call to disobedience.

"The Yesha council stands behind Pinchas Wallerstein," said Bentsi Lieberman, head of the council. "The proposal to expel Jews from their homes is an immoral decision and a breach of human rights."

Peace activists called on Attorney General Meni Mazuz to consider indicting Wallerstein for incitement and sedition, but after consultation all day Monday, Mazuz decided against recommending that he be charged, the Israel TV reported. However, Mazuz will continue examining the case, it said.

The withdrawal plan is accompanied by special legislation which says anyone physically resisting the dismantling of settlements faces up to three years in prison. The bill requires two more votes before becoming law.

Lieberman said Yesha remains opposed to violence. But the group's announcement marked the first time it has formally advocated breaking the law.

"I want a large part of the public that I believe are willing to go to prison to say so today so the decision-makers will understand where we are going," Wallerstein told Israel's Army Radio earlier Monday.

Sharon, a former settler patron, said Wallerstein's statement was "harsh." Sharon said he understood the pain of the settlers, but that they must not break the law.

Wallerstein said he did not support using force against soldiers involved in the evacuation. Calling the withdrawal plan an "immoral crime," Wallerstein said: "If someone who opposes this law has to go to prison, I am ready to go to prison."

Ran Cohen, an opposition lawmaker with the dovish Yahad Party, accused Wallerstein of making "a declaration of war."

"I think this was a call for rebellion that will lead in the end to political murder," he said.

In 1995, Prime Minister Yitzhak Rabin (search) was assassinated by an ultranationalist Jew opposed to his peacemaking efforts with the Palestinians.

Twenty-five settlements — 21 in Gaza and four in the West Bank — are to be dismantled between July and September.

In the political arena, the Israeli parliament passed the first reading of a government reform bill, clearing the way for the Labor Party to join Sharon's coalition, speaker Reuven Rivlin announced.

The measure, which must still pass three additional readings, would create a second position of vice prime minister.

Labor leader Shimon Peres has demanded the post as a condition for joining the government. Under law, there can be only one vice premier, a post held by Sharon confidant Ehud Olmert.

A senior government official said the new coalition is expected to be sworn into office by early next week.

Also Monday, Sharon said Israel would not participate in an international Mideast conference that Britain is considering hosting.

Last week, a Sharon adviser said Israel was prepared to attend, provided the conference focuses on the Palestinian economic revival and government reform, and not on issues to be negotiated by Israel and the Palestinians.

The Palestinians want the conference to deal with "final status issues," including borders and the future of Jerusalem.

"We will not participate, but we understand its (the conference's) importance," Sharon said in a statement released by his office. "We do not consider this event to be a political conference, and that is what we were told."

Palestinian Cabinet minister Saeb Erekat called Sharon's decision "very unfortunate."

British Prime Minister Tony Blair is expected to discuss the conference during a trip to the region this week.