Israel?s cabinet debated yesterday whether to approve a prison exchange with the Lebanese Hizbollah guerrilla group that has put Prime Minister Ariel Sharon's political prestige on the line. While Sharon tried to persuade his cabinet to back the de al, Yasser Arafat appeared to emerge the winner in a struggle with Prime Minister Ahmed Qurie over composition of a new government to pursue peacemaking and on the delegation of security powers.

Under the German-mediated prisoner deal, some 400 jailed Palestinian and Lebanese would be traded for a kidnapped Israeli businessman and the bodies of three Israeli soldiers killed in a Hizbollah border raid in 2000.

But the swap has run into opposition in Israel over Sharon?s willingness to release the prisoners without receiving in return information about the fate of Ron Arad, a missing Israeli airman who parachuted from his fighter-bomber over Lebanon in 1986.

?There is no need to define the importance of the decision the cabinet is being asked to make today?, Sharon said in broadcast remarks at the start of what was likely to be a lengthy meeting.

Arad has become a national icon in Israel and his family has mounted a public campaign accusing Sharon, a former general, of effectively abandoning a soldier on the battlefield.

Sharon has said failure to approve the swap could mean death for Elhanan Tannenbaum, a former army colonel abducted three years ago by a Hizbollah agent who enticed him to visit Abu Dhabi for what he thought would be a lucrative business deal.

Israeli media reports said at least nine ministers in Sharon's 23-member centre-right cabinet opposed the exchange, with three still undecided. In the West Bank city of Ramallah, Qurie agreed to a deal with Arafat on Saturday after being blocked in his efforts to transfer security powers to an interior minister of his choice, pro-reform General Nasser Yousef.

The agreement stipulates that a national council ? headed by Arafat ? would assume those powers and one of the president's loyalists would become interior minister, Palestinian officials said. The deal paved the way towards ending a month-long impasse over composition of a new government but did not meet Israeli and US demands to sideline Arafat over his alleged support for anti-Israeli violence, an accusation he denies.

Jeffrey Heller