THE Israeli cabinet is deeply divided over a proposal by Israel’s domestic security agency, Shin Bet, to release a Palestinian leader serving five life sentences for murder.

Any decision to free Marwan Barghouti, a prominent leader of the intifada, or Palestinian uprising, that began in 2000, could split the government of Ehud Olmert, the prime minister.

Olmert is believed to back Barghouti’s release to boost the Palestinian president, Mahmoud Abbas, and his secular nationalist Fatah movement against its Islamic rival Hamas, which seized control of the Gaza Strip earlier this month.

The cabinet was meeting today to prepare for a summit on the future of Gaza and the West Bank tomorrow, when Olmert and Abbas will be joined by Hosni Mubarak, the Egyptian president, and King Abdullah of Jordan.

Abbas is expected to ask Olmert to free 48-year-old Barghouti, Fatah’s most charismatic figure, who enjoys considerable public support. An opinion poll conducted in Gaza last week showed that in a presidential election, Barghouti would defeat the Hamas leader Ismail Haniya with 59% of the vote, compared with 35% for his rival.

In the late 1990s Barghouti was a darling of Israeli peace campaigners and often met Labour leaders in Tel Aviv to discuss how to promote the Oslo peace accords. During the intifada he became the de facto commander of the Al-Aqsa Martyrs’ Brigades, a group linked to Fatah that launched suicide attacks inside Israel after being targeted by Shin Bet.

He was arrested in April 2002 and was eventually convicted of murder over the deaths of four Israelis and a Greek monk. He refused to recognise the Israeli court.

In jail Barghouti continued his political activities. With the encouragement of the Israelis, he was a significant player in a Saudi-brokered deal for Hamas and Fatah to form a national unity government earlier this year.

“Barghouti freed is an asset for us,” said one Israeli government insider. “He can carry Abbas on his shoulders in the struggle to reverse the defeat in Gaza, and in due course he will replace Abbas.”

Several cabinet ministers bitterly oppose his release, among them Avi Dichter, the current homeland security minister and former head of Shin Bet. “Dichter will oppose the release because arresting Barghouti was his mistake in the first place,” said one source.

With Abbas discredited and Fatah’s largely ageing leadership in disarray over the sudden defeat in Gaza, Olmert has been advised by Shin Bet to release Barghouti “before the West Bank also falls into the hands of Hamas”.

Barghouti is popular among Hamas supporters because he is considered the leader of all Palestinian prisoners in Israel’s jails.

With his release and a serious move towards peace by Israel, Fatah could regain political credibility, first in the West Bank and later in Gaza, the government source said.

Among other measures in the Israeli package to help Abbas to be discussed tomorrow, is the gradual release of about £300m of Palestinian taxes sequestered by Israel and the supply of weapons to Fatah forces in the West Bank.

In return, the Israelis will expect a firm commitment by Abbas to full recognition of Israel and the dismantling of terrorist organisations, including the Al-Aqsa brigades.

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