Israeli Defence Minister Shaul Mofaz said yesterday he favoured expelling Palestinian President Yasser Arafat, possibly by the end of the year, because he was obstructing US-led peace moves.

Former army chief Mofaz has called several times in the past for Arafat to be deported from the Palestinian territories, but Prime Minister Ariel Sharon has overruled him, fearing an international backlash.

"I think Israel made a historic mistake by not expelling him (Arafat) about two years ago... As for the future, I believe that we will need to address this matter in a relatively short space of time, very possibly even this year," Mofaz told Army Radio.

"Arafat never wanted to reach an agreement with us and all he wants is to continue the conflict and bleed the citizens of Israel. I believe that he has to disappear from the stage of history," he said.

Israeli forces have largely confined Arafat to his half-demolished compound in the occupied West Bank city of Ramallah for the past 18 months after the government accused him of stoking violence.

Arafat, 74, denies the charge and has said he backs the "road map" peace plan. But he has refused to cede control of Palestinian security services to reform-minded Prime Minister Mahmoud Abbas to subdue militant groups as mandated by the plan.

The road map charts reciprocal steps, including an end to militant violence, Israeli pullouts from occupied territory and a Palestinian state in the West Bank and Gaza by 2005.