JERUSALEM -- Dalia Rabin-Pelosoff, daughter of the assassinated Israeli leader who signed the Oslo peace accord, resigned her post as deputy defense minister Tuesday in protest of the army's reoccupation of Palestinian towns in the West Bank.

Rabin-Pelosoff, whose father Yitzhak Rabin struck the historic deal with Palestinian leader Yasser Arafat in 1993, was named deputy defense minister in the coalition government of Prime Minister Ariel Sharon last year. An Israeli extremist opposed to Rabin's willingness to trade land for peace killed the elder Rabin in 1995.

Rabin-Pelosoff had been urging her moderate Labor party to withdraw from the coalition, but Labor opted to remain in the coalition with Sharon's hard- line Likud party.

Her resignation is the latest sign of growing discontent among Israeli liberals, who believe that Sharon wants to dismember Arafat's Palestinian Authority.

Sharon, on the other hand, denies that he aims to destroy the authority and says he will withdraw Israeli troops once Palestinian attacks against Israeli civilians stop. He has insisted that all violence stop before peace talks are resumed. No formal negotiations have been held since he took office in March of last year.

Rabin-Pelosoff has been unhappy with the army's recent re-occupation of seven of eight Palestinian cities in the West Bank following a string of Palestinian suicide attacks in June, Sharon's reluctance to reopen peace talks with the Palestinians and the government's decision to isolate Arafat.

"The government decided that Arafat is not relevant," she told Israel television in December. "This is not my opinion. In the end, we will have to speak to someone."

Although she had originally intended to resign two weeks ago, media reports said she had waited until Tuesday at the behest of Defense Minister Benjamin Ben-Eliezer, who is also the Labor party leader. The Israeli air strike that killed the military head of the Islamic group Hamas and 14 other Palestinians in the Gaza Strip Tuesday had nothing to do with her decision, political sources say.

In her resignation letter, Rabin-Pelosoff wrote that she could not "in all good conscience" remain in a government that did not continue the legacy of her late father and that the national unity government "had reached its end."

Labor party Secretary General Ophir Pines-Paz praised her decision Tuesday in an interview with Army Radio, saying that he knew "she had been deliberating over the issue for a long time and was suffering for the past few months. She could no longer be part of this government, which tells the Israeli public that there are no solutions to our problems."

©2002 San Francisco Chronicle

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