Police want to know under what conditions Sharon accepted the loan from Kern, described as a "personal friend" of the PM

OCCUPIED JERUSALEM, October 30 (IslamOnline.net & News Agencies) – Israeli Prime Minister Ariel Sharon was being grilled by police Thursday, October 30, over a simmering corruption scandal involving two of his sons, as a political crisis deepened over following criticism by Chief of Staff Moshe Yaalon of the government's security policies towards the Palestinians.

Investigators entered his official residence in occupied Jerusalem around 9:00 am (0700 GMT), police sources told Agence France-Presse (AFP), and the premier is understood to have cleared his schedule for the day.

Sharon was expected to face questioning over accusations that he used a 1.5-million-dollar loan from South African businessman Cyril Kern to return contributions for his 1999 campaign for the leadership of the right-wing Likud party that had been deemed illegal.

"Personal Friend"

Police want to know under what conditions Sharon accepted the loan from Kern, described as a "personal friend" of the prime minister.

Sharon's son Omri, a Likud MP who is believed to have brokered the loan, was questioned for an hour and a half by police earlier this month.

In January 2003, the prime minister rejected corruption allegations against his family as "scornful libel" but he has so far refrained from answering numerous questions about the affair.

Sharon senior will also have to answer questions about the activities of his second son, Gilad.

Gilad allegedly helped contractor David Appel to promote a multi-million dollar Greek resort in exchange for cash and a commitment by Appel to pour money into the Sharon family's ranch in the Negev desert.

Also questioned by police, Gilad refused to supply officers with financial documents relating to the affair.

Row Deepens

Meanwhile, a political crisis was deepening Thursday in Israel following criticism by Chief of Staff Moshe Yaalon of the government's security policies towards the Palestinians.

"The chief of staff is a very serious, responsible and reflective. If he reckons the situation in the territories is dangerous, he should say so, but not in such resounding fashion," Trade Minister Ehud Olmert told public radio.

According to sources close to Israeli Prime Minister Ariel Sharon speaking on condition of anonymity, Yaalon lambasted the government Tuesday over its uncompromising attitude towards former Palestinian prime minister Mahmud Abbas.

"It might be true that we could have been more generous with Abu Mazen (Abbas' alias), but I do believe -- as do the Americans, that the key man who should have fought terrorism, (security minister) Mohammad Dahlan, failed to do so," Olmert said.

The chief of staff has also been at loggerheads with hardline Defense Minister Shaul Mofaz over his calls for restrictions on quiet parts of the Palestinian territories to be eased more rapidly to remove what he regards as a key rallying point for Palestinian groups.

According to the Israeli media, Yaalon was summoned by Mofaz over his comments.

According to the top-selling Israeli daily Yediot Aharonot, the step came after warnings by the military's top brass that the curfew and closure would strengthen groups such as Hamas and Islamic Jihad.

"Exceeded His Powers"

Chief of staff General Moshe Yaalon had recommended the curfew be eased, particularly in quiet areas, but he was blocked by Mofaz and Avi Dichter, the head of Israel's Shin Beth internal security service, until after Israel's local elections on Tuesday, the paper said.

A high-ranking army source, later identified as Yaalon, had spoken out to Israeli journalists Tuesday against the government's failure to lift the restrictions in time to bolster the position of Mahumd Abbas, the moderate Palestinian premier who resigned last month.

But the government hit back late Wednesday with off-the-record briefings of its own, telling the Israeli media that the general had "exceeded his powers" with his remarks.

An Islamic Jihad member was meanwhile shot dead by Israeli army and another arrested in an off-limits area on the Gaza border with Israel.

Palestinian security sources said the slain man was Mohammed Awad, 26, who was active in the group's military branch, the Al-Quds Brigades.

An Israeli military source confirmed the killing.

A Palestinian boy was killed by Israeli army gunfire Wednesday night in the Balata refugee camp just outside the northern West Bank city of Nablus, Palestinian medics said.

Baha Zbeibi, 12, was shot in the stomach during a stone throwing incident, the medical sources and witnesses said.

An Israeli military source insisted the troops opened fire only when the youngsters started throwing "Molotov cocktails".

Another Palestinian armed faction, the Al-Aqsa Martyrs Brigades, claimed responsibility for a shooting attack on a car carrying Jewish settlers in the northern West Bank town of Jenin.

A man was treated at a nearby hospital in the Israeli town of Afula where his condition was said to be "moderate to serious".

Incursion

The Israeli army meanwhile mounted a brief raid into the southern Gaza Strip town of Rafah, destroying a Palestinian house before withdrawing, Palestinian security sources said.

An Israeli military source confirmed the incursion, claiming it was aimed at preventing arms smuggling by Palestinian groups across the Israeli-controlled border with Egypt.