Israel said Sunday it will build dozens of temporary homes for settlers uprooted by this summer's withdrawal from the Gaza Strip, and Palestinian leader Mahmoud Abbas (search) said he will cooperate in coordinating the pullout.

Palestinian coordination is considered by the United States and Israel a key step in helping avert chaos in Gaza after the evacuation, which is shaping up as one of the most formidable challenges in Israeli history.

With just three months to go before the start of the operation, planning appears to be lagging behind. On Sunday, for the first time, the government appointed a committee to decide where to put the settlers.

At the Cabinet meeting, ministers allocated $4.5 million for the construction of 150 temporary housing units in southern Israel (search), an official who participated in the meeting said.

The official, who spoke on condition on anonymity because of the sensitive nature of the information, said construction would begin within several days and go forward in five communities. Israel Radio said the sites would be in rural villages near the Gaza border.

The Cabinet's decision to establish a committee to oversee the withdrawal program was taken to "increase its efficiency and speed up work related to the evacuation of communities in the Gaza Strip and the northern West Bank and provide alternative living solutions," Israeli Prime Minister Ariel Sharon's (search) office said.

One idea is to relocate most of the settlers not far from Gaza, near a coastline nature preserve. Settlers called off a follow-up meeting with Sharon set for Sunday, preferring to concentrate on opposing the pullout.

The fact that no final decisions have been made, just weeks before the pullout, reflects settler refusal to believe they will be removed.

"There was no one to talk to" among the settlers, Cabinet minister Tsipi Livni told Channel 10 TV on Sunday. "It started to sink in only after parliamentary approval" last month.

Also reflecting the early stage of preparations, the military had its first simulation exercise concerning the pullout Sunday, dealing with possibilities that included settler violence or Palestinian attacks.

Security officials have warned that settler extremists could shoot at police and troops, and Palestinian militants could try to disrupt the operation as a show of strength.

The official attitude of the Palestinians could be crucial to the success of the operation, and Abbas said he would work with the Israelis, but only under certain conditions.

Speaking in Cairo after meeting Egypt's president, Abbas said, "We are ready to coordinate with the Israelis completely. But we have to know where our feet are taking us, and whether (the disengagement) is tied to the 'road map,' and whether they are complete withdrawals."

The "road map" is an internationally backed peace plan leading to a Palestinian state.

Dov Weisglass, a top aide to Sharon said, "We would of course welcome this step, and at the moment we receive a formal announcement, the channels of communication will open and will be immediately activated," he told Israel TV.

The two statements contain the seeds of disagreements that could scuttle joint planning, leaving the fates of the houses of the 8,500 settlers uncertain. Israel wants to turn the houses over to the Palestinians but only in the framework of full coordination of the evacuation.

Israel says its "disengagement" can be linked to the peace plan but insists that the Palestinians carry out their main commitment in the first phase of the plan — dismantling militant groups responsible for attacking Israelis during more than four years of violence. Abbas is moving toward co-opting militants into his security services, but it is not clear that Israel would accept that as "dismantling."

Also, a future dispute is emerging over responsibility for Gaza after the pullout. The United Nations and human rights groups already have said that Israel, even after it leaves, will be responsible for the 1.3 million poverty-stricken Palestinians in the crowded seaside territory because it will maintain control of its borders, air space and seacoast.

Israel has been promoting joint economic projects and international assistance for Gaza after the pullout, but officials have said Israel would not be held responsible for the well-being of Palestinians.