Israel's hard-line former Foreign Minister Avigdor Lieberman indicated on Monday that he would quit politics if convicted in his breach of trust and fraud case.

Such a decision could shake up the Israeli political system, because Lieberman is the driving force behind his kingmaker party, Yisrael Beiteinu.

Israel's defense ministry has published plans for 170 new housing units and another 84 guest rooms in the West Bank settlement of Rotem in the Jordan Valley, anti-settlement activists said on Sunday.

The settlement itself previously received government approval, but no building plan was set out, according to Hagit Ofran of the Peace Now organization.

Rabbi Ovadia Yosef, 92, the spiritual leader of Israel's ultra-Orthodox Shas party, was discharged from hospital on Sunday morning, a day after a colleague said he suffered a mild stroke.

Jerusalem's Hadassah Ein-Kerem hospital confirmed that the former chief rabbi of Israel had been released but refused to comment on his condition.

The European Union is drawing up a detailed new plan to restart Israeli-Palestinian peace talks, and expects to present it after this month's Israeli general election, Yediot Aharonot reported Sunday.

Citing diplomatic sources in Jerusalem, Israel's top-selling daily said the plan was intended to "bring about the establishment of a Palestinian state on the basis of the 1967 lines with east Jerusalem as its capital."

Israeli police backed by bulldozers early Sunday evicted Palestinian protesters from a hilltop camp they set up in a West Bank area slated for Jewish settlement, witnesses said.

About 200 Palestinian activists set up the camp, named Bab al-Shams (Gate of the Sun in Arabic), on Friday in the controversial E1 area between Israeli annexed east Jerusalem and the settlement of Maaleh Adumim.

Israeli troops shot dead a Palestinian on Saturday evening as he tried to sneak from the occupied West Bank into the Jewish State for work, Palestinian officials told AFP.

A medical official said that that he was contacted by Israeli authorities and asked to arrange for the collection of the man's body from Soroka hospital, in the southern Israel, after he was shot trying to cross Israel's West Bank separation barrier.

More than 200 Palestinian activists were on Saturday evening refusing to leave a protest camp they set up in part of the occupied West Bank where Israel wants to build new settler homes, despite a threat to evict them.

"Members of the Israeli Civil (military) Administration told us this morning that we have one hour to evacuate the site," one of the organizers, Abir Copty, told AFP.

Israeli army gunfire killed one Palestinian and wounded another in the northern Gaza Strip on Friday, a spokesman for the territory's emergency services said.

The two men, one of them a 20-year-old farmer, were hit by live fire east of Jabaliya and near the Israeli border, Ashraf al-Qudra said.

With just 11 left before voting day, one in four Israelis are still unsure about who to back in the January 22 general elections for the country's 19th Knesset, a survey showed on Friday.

According the results of a poll in the Maariv newspaper, only two thirds of respondents -- 67 percent -- knew how they were going to vote, while 25 percent said they were undecided.

Palestinian activists on Friday began setting up an "outpost" in E1, a strip of West Bank land east of Jerusalem where Israel said it would build thousands of new settler homes.

"We have set up 20 tents, and have enough equipment to stay here for a long time," said Abir Kopty, spokeswoman for the Popular Struggle Coordination Committee.