By a 59-40 vote, the Knesset approved a bill compensating the 9,000 settlers who will be affected by the withdrawal. Passage of the bill, which had been expected, marked the final legislative approval required before the plan can be implemented this summer.
The Cabinet was expected to approve the $871 million compensation plan at its weekly meeting Sunday. The compensation for settlers depends on the size of a family, what it owns and how long it has lived in the settlement.
For example, a couple with two children who rented a home for 15 years would receive about $230,000. If that same family owned the home, they would receive about 30 percent more, or about $300,000.
However, the plan still faces another hurdle. Sharon needs to pass a budget by March 31 or his government will collapse, possibly taking the withdrawal plan down with it, and new elections will be held.
On Wednesday, the ultra-Orthodox Shas party announced it would not support the 2005 budget in parliament, raising questions about whether Sharon's government would be able implement the Gaza withdrawal, Israeli media reported.
Without Shas' support, Sharon does not have a majority in parliament for the spending plan. Parliament must approve the budget by March 31 or Sharon's government will automatically fall, and an election will be held within three months.
Security officials expected protests and demonstrations to increase following the vote, as opponents try to scuttle the plan.
As the vote was underway, demonstrators disrupted traffic on several major arteries, burning tires and trying to block intersections, Israeli police spokesman Gil Kleiman said. Thirteen people were arrested, he said.
Earlier Wednesday, Israel's hardline defense minister unexpectedly cut short the term of his outspoken army chief, with a new commander to take over just days before the start of the planned withdrawal from the Gaza Strip this summer.
The curt dismissal of Lt. Gen. Moshe Yaalon (search), announced in the middle of the night, triggered wall-to-wall criticism, with many politicians and commentators accusing Defense Minister Shaul Mofaz (search) of endangering the Gaza pullback because of personal tensions with his army chief.
Yaalon, widely seen as a successful commander, has frequently criticized government policy in the past, saying its harsh measures increased Palestinian hatred and violence.
In Gaza, Palestinian militants fired two mortar rounds at the Jewish settlement of Morag. No injuries or damage were reported, but the attacks threatened the fragile truce.
Also Wednesday, Jordan announced it would return its ambassador to Israel next week, after a four-year absence.
Yaalon was told by Mofaz late Tuesday that his three-year term, which is up in July, would not be extended by another year, as is customary in the military. Mofaz' decision amounted to a dismissal, since Yaalon had requested the extension, and such a request is traditionally approved in the military.
"A slap in the face," read the headline on a front-page commentary in the Yediot Ahronot daily.
The Gaza pullout is expected to be accompanied by violent confrontations between Israeli soldiers and settlers, and the army should not be focusing on a shakeup in its top brass when Israel is facing "one of the most problematic, difficult and complex tests" in its history, Cabinet minister Haim Ramon said.
Yaalon, widely referred to by his nickname Boogie, has also been credited for leading a successful campaign against Palestinian militants during more than four years of fighting.
But Mofaz and Yaalon have had a tense relationship, which peaked in 2003 when the army chief publicly criticized the defense minister's decision to take a hardline approach toward then-Palestinian Prime Minister Mahmoud Abbas (search), who was trying to push ahead with reforms over the opposition of Yasser Arafat (search).
At the time, Yaalon said Mofaz's hardline policies — strongly backed by Sharon — contributed to Abbas' decision to step down in frustration, after only four months in office. Yaalon reportedly enraged Sharon when he said Israel's harsh measures increased Palestinian hatred and violence.
Yaalon will end his term in the second week of July — just as Israel is to begin implementing the "disengagement" from Gaza and four West Bank settlements. Avi Dichter, chief of Israel's internal security service, the Shin Bet, also a key player in planning the withdrawal, is leaving his post in May.
"For both the Shin Bet chief and the army chief, who are preparing the disengagement, for them not to be the ones implementing it is a problem," Ramon said.
Commentators described Yaalon as pragmatic. At one point, the army chief warned Israeli politicians not to trust Arafat, and criticized Shimon Peres for visiting the veteran Palestinian leader in Gaza after violence erupted in Sept. 2000.
He also called the 1993 interim peace accords a "Trojan horse," but then repeatedly backed making generous good-will gestures to strengthen more moderate Palestinian leaders, such as Abbas.
Likud lawmaker Yuval Steinitz, who heads parliament's Foreign Affairs and Defense Committee, said the poor personal relations between Mofaz and Yaalon were "no secret." Steinitz also had several public arguments with Yaalon, yet said he was "not happy" about the decision.
"Boogie Yaalon was a good chief of staff, and I say this despite the differences of opinion, sometimes serious ones, that I have had with him during the past few years," Steinitz told Israel Army Radio.
Just before Sharon announced his plan to unilaterally withdraw from all Gaza Strip and four West Bank settlements, Yaalon made clear he was opposed to any unilateral moves. At one point, Sharon reportedly was angry because he felt Yaalon was not giving enough support to the plan.
On Tuesday, Sharon told a news conference that Israel had already begun coordinating the withdrawal with the new Palestinian leadership. The plan, he said, would solidify Israel's grip on main West Bank settlement blocs, which "will be part of the Jewish state in the future."
But Sharon warned that if Abbas fails to ensure calm during the pullout, Israel's reaction will be "very, very harsh and hard."