JERUSALEM, Feb. 16 (JTA) — Putting its money where its mouth is, the Israeli government has won key parliamentary approval for relocating settlers evacuated from the Gaza Strip. The Evacuation and Compensation Bill passed second and final readings Wednesday in the Knesset by a narrow vote of 59 to 40, reflecting just how torn Israelis are over looming withdrawals from Gaza and four West Bank settlements. While the ratification of the $870 million relocation package boosts Prime Minister Ariel Sharon’s plan to “disengage” from the Palestinians, the fact that 17 lawmakers from his own Likud Party abstained was indicative of the infighting Sharon faces in implementing it. But Sharon enjoys a broad coalition with the Labor Party and guarantees of support from left-wing opposition factions. “It simply is inconceivable that Gaza could ever be part of the Jewish state,” Vice Prime Minister and Labor Chairman Shimon Peres said during a Knesset debate that lasted two days. Those opposed to the plan were no less impassioned — and backed by right-wing protesters who blocked traffic junctions throughout Israel and scuffled with police during the vote. “This is a black day for the State of Israel,” said Yehiel Hazan, one of the Likud rebels. “All those who vote for the disengagement plan should beg forgiveness of the terror victims.” The government is expected to issue its first eviction notices soon, with settlers who resist the move warned that they could forfeit some of their compensation perks. But a more serious hurdle for Sharon is the 2005 budget, which was blocked in the Knesset last year. If he doesn’t get Finance Minister Benjamin Netanyahu’s belt-tightening package passed by March 31, the government falls. In another development, Sharon and Defense Minister Shaul Mofaz announced that Lt. Gen. Moshe Ya’alon, the military chief of staff, would step down in July, just weeks before the disengagement plan gets under way. The termination date is the official end of Ya’alon’s commission, but other chiefs of staff have been granted extensions of one year. Ya’alon declined to discuss the decision, but security sources attributed it to his past public criticism of Mofaz’s tough policies against Palestinian terrorism — though Ya’alon himself is derided by many on the left as a hard-liner. The main contenders to replace Ya’alon are Dan Halutz and Gabi Ashkenazi, both Ya’alon deputies with extensive hands-on experience in counterterrorism. But some Israelis are concerned about how Ya’alon’s departure will affect the Gaza withdrawal, coming as it will shortly after the scheduled retirement of Shin Bet security service chief Avi Dichter in May. “At a time of such immense challenges, with the risk of our troops scuffling with settlers and being fired at by the Palestinians, can we really afford to be breaking in new chiefs?” a security source said.