Residents of a Jewish settlement in the Gaza Strip (search) have agreed to move to a community inside Israel and will begin the evacuation in March, an Israeli official said Sunday.

Yonatan Bassi, head of the government administration in charge of Israel's planned withdrawal, on Sunday confirmed a deal had been reached with residents of Peat Sadeh (search) last week.

The community, located deep in the southern Gaza Strip, will be the first to be dismantled under Prime Minister Ariel Sharon's (search) plan to withdraw from Gaza next year.

Bassi said a total of 25 Gaza families have finalized agreements with the government, 20 of them from Peat Sadeh.

Although the deal affects a tiny percentage of the 8,200-strong settler population of Gaza, it would give Sharon an important boost.

The settler leadership has pledged mass resistance to the evacuation, and Israeli officials are concerned about the possibility of violence.

Seeking to head off the violence, the government is offering cash advances and other incentives to encourage settlers to leave voluntarily ahead of the withdrawal, which is scheduled to begin next summer.

In addition to the Peat Sadeh deal, Bassi said most residents of the larger Elei Sinai settlement have agreed in principle to move, but still haven't worked out final details with his administration. About 400 Jewish settlers live in Elei Sinai, which is located in northern Gaza along the border with Israel.

"We are in contact with a great number of settlers," Bassi said at a news conference. He would not give numbers, however.

Bassi said the Peat Sadeh residents have agreed to move to Mavkiim, a rural village near the southern Israeli city of Ashkelon. He said the move would require construction of new homes, schools and other infrastructure to accommodate the settlers. The move is to begin in late March, he said.

Bassi declined to say how many Gaza settlers have applied for cash advances, which are being offered while final compensation legislation is pending in parliament, but said there has been a sharp increase in interest in the past two weeks.

That surge coincides with Sharon's alliance with the opposition Labor Party.

The inclusion of Labor into Sharon's coalition, which is expected to be finalized in the coming days, will stabilize the government as it pushes forward with the withdrawal and make it more difficult for hard-line lawmakers to torpedo the plan.

Bassi said no cash advances have been paid yet. The said the compensation legislation is expected to be approved by parliament by the end of January.

Sharon has said the continued occupation of Gaza, which Israel captured in 1967, is untenable. Some 1.3 million Palestinians live in the volatile area, and settlements are attacked by Palestinian militants almost daily.

Eran Sternberg, a spokesman for settlers opposed to the evacuation, denied that Peat Sadeh residents had signed any agreement and said they do not really want to move.

Bassi's press conference was just an attempt to manipulate the media, Sternberg said.

Bassi said he had asked Peat Sadeh residents to speak at the news conference but they had refused, apparently due to pressure from other settlers.