JERUSALEM (AP) -- Residents of some Jewish settlements in the northern Gaza Strip have proposed that their entire communities be moved to locations inside Israel under Prime Minister Ariel Sharon's plan to withdraw from Gaza next year, a lawmaker said Wednesday.

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Also Wednesday, Israeli and Palestinian officials said the two sides have agreed on logistics for the Jan. 9 election to replace Yasser Arafat, who died last month, and the Bush administration approved $20 million in direct aid to help the Palestinian Authority as it prepares for the vote.

The U.S. aid, allowed only by waiving existing law, is meant to help the authority pay its utility bills so its power will not be cut off, White House spokesman Scott McClellan said.

"They are in a serious financial situation right now," he said.

Palestinian Cabinet minister Saeb Erekat said the agreement with Israel would be based on the same procedures that were in place for the last Palestinian elections in 1996. That would include a key Israeli concession - allowing residents of disputed east Jerusalem to vote. Both sides claim the city.

"I am satisfied with that. I am happy," he said.

A new poll, meanwhile, has lent backing to earlier surveys that showed a tight race.

The poll, conducted by the independent Jerusalem Media and Communication Center, showed interim leader Mahmoud Abbas with 32 percent and challenger Marwan Barghouti with 26 percent. Barghouti is serving five life terms in an Israeli prison after murder convictions.

The poll, which questioned 1,200 Palestinians and had a margin of error of 3 percentage points, showed 9 percent backing another candidate and 27 percent undecided.

One of the 10 Palestinian candidates dropped out of the race Wednesday. Reformer Hassan Khreishe, the acting speaker of the Palestinian Legislative Council, said Israeli restrictions hampered his campaign. Polls showed Khreishe with little support.

NewYorkPost.com