Israeli Prime Minister Ariel Sharon has signalled he is serious about reaching a peace deal with the Palestinians. Sharon indicated a willingness to withdraw from the West Bank and Gaza - unusually for him describing Israel's military presence in the Palestinian territories as an "occupation". "I think that the idea of keeping 3.5 million Palestinians under occupation is the worst thing for Israel, for the Palestinians and also for the Israeli economy," the website of Israeli daily Maariv quoted him as saying. Sharon and his Palestinian counterpart Mahmoud Abbas, better known as Abu Mazen, are expected to meet on Wednesday in Jerusalem, Israeli officials said.