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In this story: Overnight gunfire Sharon to seek 'non-belligerence' accord Sharon on tight deadline for coalition RELATED STORIES, SITES 
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JERUSALEM (CNN) -- Israel's hard-line prime minister-elect extended an olive branch to outgoing Prime Minister Ehud Barak on Friday, offering the former army chief the position of defense minister in his coalition government.
Sharon, who trounced Barak at the ballot box on Tuesday, made the offer during a two-hour meeting with Barak as the two discussed the transition of power and Sharon's efforts to link with the Barak's left-leaning Labor Party for a national unity government, an aide to Sharon told CNN. Sharon was also reportedly considering offering to Labor officials the finance ministry and the foreign ministry.
Barak's response to Sharon's offer was not immediately known.
It was Barak's handling of a months-long spate of violence between Israelis and Palestinians that likely cost him the election.
Facing increased criticism and losing popularity, Barak forced the new election when he resigned in December, more than two years before the end of his term. HIs move pre-empted the Israeli Knesset's drive to disband and call new across-the-board elections.
The violence, which erupted nearly five months ago following Sharon's visit to an east Jerusalem site considered holy by both Jews and Muslims, continued overnight with a heavy exchange of gunfire near the Jewish settlement of Psagot in the West Bank.
Palestinian gunmen and Israeli troops guarding the settlement lit up the sky with bursts of gunfire. No injuries were reported, but the offices of the Palestine Red Crescent Society in the nearby Arab area of Al Bier were damaged.
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Gaza saw more death, however, when a 16-year-old Palestinian was killed during a gunfight between Israeli soldiers and Palestinians near a Jewish settlement. It was the first fatality in the clashes since Monday.
More gunfire erupted in the West Bank town of Ramallah after the Barak-Sharon meeting ended.
More than 400 people -- most of them Palestinians -- have been killed in the violence. Sharon campaigned on a pledge that he would secure peace with the Palestinians while guaranteeing Israeli security.
Sharon is considered Israel's leading hawk on security issues, but he said on Friday that would seek a "non-belligerency" agreement with the Palestinians rather than trying for a comprehensive peace agreement the way Barak did.
"I am in favor of a non-belligerence arrangement, without a timetable but with an expectation table," Sharon told the daily Yedioth Ahronoth.
Also Friday night, Barak sent a letter to U.S. President George W. Bush saying the proposals he offered the Palestinians in peace negotiations were now off the table.
Meanwhile, U.S. Secretary of State Colin Powell said Friday he would visit the Middle East and the Persian Gulf at the end of the month, making six stops there in 72 hours on his first official solo trip abroad.
The Palestinians had pushed to have Sharon pick up the peace talks where they left off shortly before the election, but Sharon aides have said the new prime minister will not be bound by any unsigned agreement.
The Clinton proposals included a kind of joint sovereignty over the east Jerusalem holy sites and a return of 95 percent of the West Bank to Palestinian control. Sharon has vowed Jerusalem will remain Israel's undivided capital, and that he is not inclined to give the Palestinians any more land than they already have -- about 42 percent.
Following a car bomb explosion Thursday in a religious neighborhood near central Jerusalem, Sharon repeated that there would be no negotiations until the violence that has marked most of the last five months ends.
Barak, who has said he will resign from the Israeli parliament and "step away" from politics once Sharon is in office, told his Labor Party Thursday night that he thought Labor should join with Sharon even though they differ widely on how to negotiate peace with the Palestinians.
Without a coalition with Labor, Sharon would be forced to approach more conservative nationalistic and religious parties to form his government.
Despite the fact he is quitting as party chief, Barak appointed himself and former prime minister Shimon Peres to head a Labor Party panel charged with negotiating with Sharon about joining the government.
Sharon is under deadline to form his government. After the election is certified on February 13, he has 45 days to present a government to the Knesset that it can approve.
Adding to the pressure is a late March deadline for Knesset to approve a budget. If Sharon is unable to pull the budget together, the Knesset will disband and new elections -- for both parliament and the prime minister -- will be held.
CNN Jerusalem Bureau Chief Mike Hanna contributed to this report.
Sharon vows no peace talks until violence ends
February 8, 2001
Sharon sets about building coalition
February 7, 2001
Sharon wins landslide victory in Israeli election
February 6, 2001
Israelis voting in prime ministerial election
February 5, 2001
Israel Ministry of Foreign Affairs
Israeli Prime Minister's Office
Knesset, The Israeli Parliament
Likud
Avoda (Labour) Party
Israel Defense Forces
Palestinian National Authority
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