Israel will ask the United States for money to help with the Gaza withdrawal, Israeli Vice Premier Shimon Peres (search) said Tuesday, ahead of a trip to Washington.

Peres spoke as Gaza settlers sought higher compensation for their homes and demanded to be moved to Israel as a group — a sign that many have resigned themselves to the pullout, after initially threatening a fight to the finish.

Settler leaders met with Prime Minister Ariel Sharon (search) Tuesday to discuss compensation and resettlement, ending months of angry refusal to talk.

Sharon agrees in principle to a proposal to move most Gaza settlers as a group to the Nitzanim coastal area, between the towns of Ashkelon and Ashdod, just a few miles from their current homes, a senior Israeli official said. Sharon was expected to tour the Nitzanim area in coming days.

In a meeting with Cabinet ministers and senior government officials involved in the withdrawal, an angry Sharon demanded quicker action. He urged officials to cut through red tape, participants said.

The government, meanwhile, approved the first compensation deal with a settler family, saying the first check would be signed by weeks-end, after a committee on Monday reviewed the first eight compensation claims.

So far, about 60 out of 1,600 settler families have reached tentative agreement with the government to leave voluntarily this summer, in exchange for compensation.

In the Gaza Strip (search), Palestinian gunmen on Tuesday shot and seriously wounded an Israeli in a greenhouse in the Jewish settlement of Morag, the army said.

An umbrella militant group, the Popular Resistance Committee, claimed responsibility for the shooting attacking, saying it was "in retaliation for Israel's daily crimes against the Palestinians."

Hours before leaving for Washington, Peres refused to say how much money Israel is seeking from the United States. Peres is to meet Vice President Dick Cheney and other Bush administration officials to discuss the planned withdrawal from Gaza and four West Bank settlements. Sharon is to meet with Bush next week.

One official close to the Bush administration said there are expectations in Washington that Israel would request US$500 million in aid.

Peres told The Associated Press on Tuesday that "for Gaza, I think, the United States has already allocated money, and we want to coordinate our efforts."

Peres said U.S. aid would be used to assist the Palestinians and to develop the northern Galilee region and the southern Negev Desert, near Gaza. Israel wants to relocate Jewish settlers to these areas, and is offering extra compensation to those who agree to move to the outlying regions.

An Israeli government official, speaking on condition of anonymity, said U.S. funding for the Galilee and the Negev would free up Israeli money to increase compensation for settlers, who have complained they are not being paid enough for their properties.

Israel has budgeted about US$1 billion for the pullout.

But the withdrawal could cost a great deal more once Israel finishes compensating the 9,000 evacuated settlers, moves its military installations and completes construction of the new fences and surveillance equipment it is putting along its border with Gaza, a government official said on condition of anonymity.

In a sign that some Jewish settlers are coming to terms with the withdrawal, settler leaders met with Sharon on Tuesday. They said they would demand bigger cash payouts and seek to be moved as a group to a coastal area inside Israel.

One settler said between 1,000 and 1,100 families were interested in moving to the area of Nitzanim, a pastoral coastal area near the southern city of Ashkelon, and just a few miles from their current homes in the Gaza Strip.

Amram Etach, mayor of the Bdolah settlement in Gaza who is participating in the meeting with Sharon, said he and the 50 families in his town are willing to get less financial compensation in exchange for being relocated as a group.

"The communal life we have here we won't have anywhere else," Etach told Israel's Army Radio.

Negotiations between the government and the town of Nitzan, just 2 miles from the Nitzanim coast, began two months ago, Dan Meir, a member of the Nitzan council said. The Housing Ministry is working with town leaders to add up to 600 families to the community, increasing the size sixfold.

Other Gaza residents would move to nearby communities, settler leaders said. The overall plan, which was presented to Sharon late Monday, is to build 10 new towns in the Nitzanim area, three of them agricultural, Etach said. Settler leaders said Sharon gave tentative approval.

Environment Minister Shalom Simhon said the plan was bad for the environment. He said moving such a large number of people to Nitzanim will destroy a nature reserve along the coast, and suggested they relocate to other parts of the Negev Desert.

"We shouldn't be enticed, for the sake of dialogue with the settlers, to sacrifice one of the most unique natural areas in Israel, and perhaps the world," Simhon said. "We can't solve one problem by creating another."

The Gaza Regional Council — which represents 8,500 settlers slated for evacuation — said favors the move to the Nitzanim area, if evacuation is inevitable.

"Ninety percent of the residents don't want to leave Gush Katif but despite this I said months ago that we need life insurance in case, God forbid, the fight is lost," said lawmaker Zvi Hendel, a Gaza settler.

"When someone takes out life insurance they don't necessarily plan to die ... money is not important here it is important to preserve the lifestyle that was built," Hendel said.