HIGHLIGHTS: Satterfield Due in the Region Monday|| Israelis Critical of So-called 'Roadmap' Peace Plan on Security Grounds, Palestinians Equally Skeptical on Lack of Timetable for Implementation|| Two Palestinians Killed in Latest Intifadha Confrontations|| Ex-Mossad Boss Favors Dialogue Between Israel & the Palestinian Hamas Resistance Group||STORY: Palestinian officials said on Friday they would formally respond to a U.S.-sponsored peace plan within days, but Israelis indicated their response would be delayed by the collapse of their coalition government.

U.S. Deputy Assistant Secretary of State David Satterfield is due in the Middle East on Monday to renew Washington's efforts to calm a Palestinian independence uprising ahead of a possible U.S. war on Iraq.

Israeli government sources said there would be "very little movement" on the internationally backed "roadmap" to peace until the rightist Likud party of Prime Minister Ariel Sharon had decided who would lead the party in coming elections.

"We are almost done with formulating our response," Palestinian Planning and International Cooperation Minister Nabil Shaath told Reuters. "We might send it earlier so he (Satterfield) can come with an idea of our position."

During his week-long mission, Satterfield will travel to the Jordanian capital Amman for international talks on Palestinian reforms, a key element of the roadmap, U.S. officials said.

Other elements of the peace plan include an end to armed attacks, Israeli occupation army withdrawals from occupied Palestinian cities, mutual efforts toward a final peace settlement, and a Palestinian state in the West Bank and Gaza Strip by 2005.

Israel and the Palestinians have both expressed misgivings about the roadmap -- the former concerned that its security will not be sufficiently safeguarded, the latter irked at the lack of a strict timetable for implementation.

The "Quartet" of Middle East mediators -- the United States, the United Nations, the European Union and Russia -- hopes to adopt a final version of the roadmap once Israel and the Palestinians give their official response.

LIKUD PRIMARY TAKES PRIORITY

A source in Israeli Prime Minister Ariel Sharon's office said Israel was still formulating its response to the roadmap but that it would not be ready for submission to Satterfield.

"We do not expect to move on the roadmap until the political situation is clearer," the source said, referring to the collapse of Sharon's ruling coalition last week.

Sharon opted for a national ballot nine months early after his main coalition partner, the center-left Labor Party, bolted his 20-month-old government in a dispute over funding for Jewish settlements in territories the Palestinians want for a state.

Sharon has made his Likud party rival, Benjamin Netanyahu, foreign minister in Israel's caretaker government. The two will face off in a primary that will choose a leader to take Likud into general elections expected to be held in January.

The source saw the primary coming in late November. "Until then, there will be very little movement on the roadmap."

An Israeli opinion poll on Friday indicated Sharon, a longtime hawk who shuns dealing with Palestinian President Yasser Arafat, would survive the electoral turmoil.

The survey in the mass circulation Maariv daily said 48 percent of Likud voters would cast their ballots for Sharon in the primary, compared with 38 percent for Netanyahu, who was prime minister from 1996 to 1999.

TWO PALESTINIANS SHOT DEAD IN LATEST INTIFADHA CONFRONTATIONS

In latest intifadha, uprising against occupation, confrontations in the West Bank on Friday, Israeli occupation troops shot dead a Palestinian policeman while dispersing stone-throwers in Tel village, Palestinian witnesses and security sources said.

Earlier, Israeli occupation soldiers killed a Palestinian during a raid of Tulkarm refugee camp in the West Bank, Palestinian security officials said. Israeli occupation sources said two members of the Resistance Hamas group were detained.

Israeli occupation forces in the town of Khan Younis in the Gaza Strip dynamited the family home of a Palestinian who killed two Jewish settlers on Wednesday.

EX-MOSSAD BOSS FAVORS DIALOGUE BETWEEN ISRAEL & HAMAS

According to the former head of Israel's spy service Mossad, dialogue between Israel and the Palestinian resistance movement Hamas could take place in the future.

"Considering that we will one day strike some kind of a deal (with the Palestinians), we won't be able to ignore Hamas," Ephraim Halevy was quoted as telling the Yediot Aharonot daily.

"It may still be too early to talk with Hamas, and such a dialogue may be impossible as long as Hamas keeps on sending kamikazes" inside Israel, he added Friday.

"But it may also be the case that if political alternative were offered to Hamas, if it realized that we're ready to talk, it would stop" carrying out 'suicide' bombings, he added.

Hamas, whose powerbase is in the overcrowded, impoverished Gaza Strip, has claimed responsibility for the great majority of resistance attacks against Israeli occupation targets since the beginning of the 25-month uprising.

Halevy headed the Mossad for more than four years before being appointed head of Israel's national security council, an advisory body to the government, two months ago.

Earlier this week, he publicly contended Palestinian leader Yasser Arafat and Iraqi President Saddam Hussein will have vanished from the world scene within a year.

Halevy took over at Mossad in September 1997, shortly after agency's biggest bungle with the botched assassination in Amman of Khaled Meshaal, the head of Hamas' political wing.

In exchange for the liberation of two Mossad agents arrested in Jordan, Israel released Hamas' founder and spiritual leader Sheikh Ahmed Yassin in October.

PHOTO CAPTION

A Palestinian boy holds a young girl as they look out from a house decorated with militant graffiti, in central Gaza City, November 8, 2002. Palestinian officials said they would formally respond to a U.S.-sponsored peace plan within days, but Israelis indicated their response would be delayed by the collapse of their coalition government. (Damir Sagolj/Re