ISRAEL will destroy the 1,200 houses to be vacated when the Jewish settlements in the Gaza Strip are evacuated this summer, Condoleezza Rice, the US Secretary of State, said yesterday.

Israel had feared the symbolism of Hamas flags flying from the red-roofed bungalows, but the Army was reluctant to demolish the houses because it would put soldiers’ lives at risk.

Palestinians say they want the houses to be replaced by high-rise blocks to alleviate overcrowding among the 1.3 million population in Gaza.

“It was their choice,” Mark Regev, an Israeli Foreign Ministry spokesman, said. “If they wanted (the houses), they could have had them.”

Details of the demolition have yet to be worked out with the aid of James Wolfensohn, the American economic envoy, but the houses are likely to be demolished immediately after the withdrawal, while the Palestinian Authority will remove the rubble to create temporary jobs.

The fate of the settlers’ 1,000 acres of greenhouses and crucially the free movement of produce to markets in Israel and overseas is another area that Dr Rice believes will be crucial to the success of the withdrawal and the revival of Gaza.

After two days of meetings with the Palestinian and Israeli leaderships, Dr Rice said that both sides had decided to look at ways to guarantee the flow of people and goods in and out of Gaza to aid the economic revival of the region.

Dr Rice acknowledged a growing spirit of co-operation between Israelis and Palestinians before the withdrawal, and voiced her hope that a successful and peaceful pullout could pave the way to a final resolution of the conflict.

But even as she spoke, Palestinian militants linked with Fatah and Islamic Jihad attacked an Israeli post in southern Gaza. One gunman was killed and three soldiers were wounded, one of whom later died in hospital.

The violence erupted in the Philadelphi corridor, a strip of southern Gaza along the Egyptian border controlled by Israel. Gunmen fired on soldiers with grenades and machineguns, underscoring the fragile nature of the four-month ceasefire.

Dr Rice said that Mahmoud Abbas, the Palestinian President, he recognised how vital it was that Israeli security forces be allowed to evacuate, free from attack, 9,500 Jewish settlers in the 21 Gaza settlements and four in the West Bank free from attack. But Ariel Sharon, the Israeli Prime Minister, accused the Palestinian Authority of failing to deliver on its commitment to dismantle militant infrastructure or halt the violence.

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