JERUSALEM (Reuters) - Israel's chief prosecutor has drafted an indictment against Prime Minister Ariel Sharon in a long-running corruption scandal that could drive him from office, Israel's Channel 2 television said on Saturday.

The report said State Attorney Edna Arbel plans to submit the charge sheet within days to Attorney General Menachem Mazuz, who will make the final decision on whether to put the 76-year-old leader on trial.

Channel 2 said it could take Mazuz months to decide whether to accept Arbel's recommendations, adding to a cloud of political uncertainty that has enveloped Sharon.

A spokesman for the Justice Ministry, which represents both the state attorney and the attorney general, declined to comment on the report.

Sharon's office also had no comment and Israel Radio quoted sources in the prime minister's office as saying Sharon would only comment when Mazuz finally decided about the indictment.

Arbel's draft concluded there were sufficient grounds to charge Sharon with bribery in connection with a real estate deal involving his son, Gilad, and land developer David Appel, a stalwart of the prime minister's right-wing Likud party, the report said.

The latest development catches Sharon during a stormy time while he tries to win support from the United States and from his own cabinet for his plan unilaterally to evacuate Jewish settlements in the Gaza Strip and some in the West Bank.

There was no immediate indication whether the reported draft indictment would delay Sharon's planned trip to Washington on April 14 to meet President Bush regarding his disengagement plan.

Palestinians fear an Israeli pullout from the Gaza Strip would mask an attempt by Sharon to annex settlement blocs in the West Bank, denying them the viable state they seek.

Prosecutors allege Appel hired Gilad Sharon in 1999 and paid him large sums to persuade his father, then foreign minister, to promote real estate deals including a Greek island resort that was never built.

Sharon has in the past denied any wrongdoing. Appel, who was charged in January with trying to bribe Sharon in the 1990s, also denies the allegations against him. Appel's indictment did not cite any evidence Sharon knowingly accepted money to grant political favors.

COALITION MEMBERS CALL FOR SHARON'S SUSPENSION

Some ministers from the centrist Shinui party, his largest coalition partner, have called on Sharon to suspend himself if the Attorney General decides to indict him, Israeli media reported after the Channel 2 report.

Sharon has said he has no intention of resigning over the allegations. In 1993, Israel's high court ordered Arye Deri, leader of the ultra-Orthodox Shas party, to resign from the cabinet over corruption charges. He was sent to prison in 1999.

Legal experts are divided over whether under law, Sharon would be forced to resign if indicted.

"Sharon must suspend himself -- it is inconceivable for a prime minister to have an indictment against him," said Menachem Klein, a political analyst at Israeli's Bar Ilan University.

Sharon has faced a public backlash over the past months over allegations of corruption and misconduct regarding multiple scandals. Israeli police are currently conducting investigations of the cases and Sharon denies involvement in all of them.

One case alleges that Sharon's sons, Gilad and Omri, used a $1.5 million loan from a South African businessman as collateral to repay alleged illicit contributions to Sharon's campaign. Foreign funding of political campaigns is illegal in Israel.

Copyright © 2003 Reuters Limited.

BUT WAIT, WHAT DOES ISRAELI PRIME MINSITER SHARON HAVE UP HIS SLEEVE? HE IS FLYING TO WASHINGTON DC THERE MUST BE GAME PLAN THAT HE NEEDS PRIVATE ONE ON ONE CONVERSATION THAT WILL IN TURN DISSOLVE SOME OF HIS PROBLEMS BACK HOME.

story #2

SHARON COMING TO WASHINGTON DC TO MEET BUSH

BY JENNIFER LOVEN, AP

WASHINGTON - President Bush will hold a long-delayed meeting with Israeli Prime Minister Ariel Sharon next month as the administration sharpens its focus on Mideast peacemaking amid spiraling violence and tensions.

Bush and Sharon will discuss "the war on terror and the search for Israeli-Palestinian peace" when they meet April 14 at the White House, said Bush spokesman Scott McClellan.

The session, in the works for weeks, is scheduled two days after Bush is to welcome Egyptian President Hosni Mubarak to his Texas ranch. A week later, on April 21, Bush will meet with Jordan's King Abdullah at the White House, McClellan said.

Mideast peace talks have been derailed recently amid new fighting between Israel and the Palestinians and Israel's consideration of a plan to disengage from the Gaza Strip.

On Monday, Israel assassinated Hamas founder Sheik Ahmed Yassin and later threatened to kill the entire Hamas leadership ahead of the possible Gaza withdrawal. The assassination touched off a wave of Palestinian protests and Hamas elected as its new leader a hard-liner who has pushed for accelerating attacks on Israel.

After initially declining to criticize Israel, the Bush administration said it was "deeply troubled" by the targeted killing and urged both sides to respond with restraint, fearing that the developments could increase tensions and make it harder to pursue peace.

At the same time, the White House continued to express concern about Hamas' threats of retaliation, and repeatedly noted that it considers Hamas a terrorist organization.

Next week, three U.S. emissaries are expected to make a third trip to the region to talk with Israeli and Palestinian officials about Sharon's proposal to dismantle nearly all Israeli settlements in Gaza and some in the West Bank.

After initial hesitation, the administration has warmed to the idea of Israel relinquishing control of Gaza and expelling the 7,500 Israeli Jews who live in the predominantly Palestinian area.

But questions remain, including administration concerns about whether such a unilateral move by Israel is consistent with the U.S.-backed "road map" peace plan and whether it enhances - or disrupts - the prospects for a negotiated settlement between Israelis and Palestinians. As well, the land Israel may be ready to relinquish is unlikely to meet Arab expectations, which include part of Jerusalem as well as all the territory lost in war with Israel in 1967.

The team of administration officials, made up of Assistant Secretary of State William Burns, National Security Council Deputy Director Stephen Hadley and the council's Mideast specialist, Elliot Abrams, traveled to the region twice in recent months.

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