HIGHLIGHTS: Likud Tries to Push Budget through Wednesday||Another Palestinian House Demolished in East Jerusalem||Exiles Expected to Leave Cyprus Wednesday||Tenet Mideast Visit Delayed||STORY:Israel's rightwing Prime Minister Ariel Sharon faced a tough test of his authority on Wednesday after firing ministers from a coalition partner for voting down an austerity bill.

Finance Minister Silvan Shalom insisted the government had enough support to push the bill through and reverse the embarrassing defeat, in which coalition members including five ministers of the ultra-Orthodox Shas party voted against it.

Sharon's letters of dismissal to the four ministers of Shas, Israel's third biggest party, go into effect on Wednesday night, giving coalition members time to thrash out a solution.

Leading politicians and independent analysts said both sides had a major stake in healing the rift.

PALESTINIAN HOUSE DEMOLISHED IN EAST JERUSALEM

The new political crisis came as Palestinian Resistance groups renewed a bombing campaign that could see Israel send its military back into Palestinian-controlled areas of the West Bank and Gaza.(Read photo caption)

Meanwhile on Tuesday, Israeli occupation forces have demolished a house belonging to a Palestinian resident in Arab East Jerusalem.

Jerusalem municipality workers, guarded by Israeli occupation forces, used bulldozers to demolish the house. Arab residents outside the house argued with the Israeli forces, trying to stop the demolition.

House demolitions are a politically charged issue in the city, with Arabs accusing Israel of pushing them out of the city and Israel accusing Arabs of erecting unlicensed structures.

FLIGHTS INTO EXILE

In Larnaca, Cyprus, European planes prepared to fly a dozen Palestinians into exile on Wednesday, ending nearly two weeks of squabbling among fractious EU states.

The deal ended a 39-day siege by Israeli troops of Bethlehem's Church of the Nativity where 13 Palestinian Resistance men had holed up during the Jewish state's military offensive in Palestinian cities.

Cypriot officials said a Spanish transport plane landed at Larnaca late on Tuesday to take several of the Palestinians, three of them to Spain itself. An Italian aircraft was also preparing to leave Larnaca at 8 a.m. (1 a.m. EDT) on Wednesday with another three Palestinians on board.

With Spain and Italy taking three men each, Greece and Ireland will take two each and Portugal and Belgium one apiece.

The 13th will stay in Cyprus, an EU candidate country, for the time being although Cyprus has made clear it wants him out.

PEACE MISSIONS

In Washington, Secretary of State Colin Powell said a visit to the Middle East by CIA director George Tenet had been delayed, but the spy chief would eventually make the trip.

President Bush said after meeting Sharon on May 7 that Tenet would go to the Middle east to work on a Palestinian security force.

Canadian Foreign Minister Bill Graham said he will visit the region this week with a message urging Palestinians to stop guerrilla violence while asking Israelis to return to the negotiating table and pull troops out of Palestinian areas.

Preparing for a June meeting of the foreign ministers of the Group of Eight nations, which he will chair, Graham said he would largely be supporting the U.S. approach to the conflict.

PHOTO CAPTION

A Palestinian boy runs after an Israeli army armored troop carrier as it patrols the streets of Askar Refugee camp, in the West Bank city of Nablus, Tuesday, May 21, 2002. A few blocks away, sits the home of Palestinian bomber Osama Boshkar, who blew himself up in a Netanya, Israel market on Sunday, killing three Israelis and wounding 50. (AP Photo/Brennan Linsley)
- May 21 3:10 PM ET