We consider M-theory on compact spaces of G(2) holonomy constructed as orbi
folds of the form (CY x S-1)/Z(2) with fixed point set Sigma on the CY. Thi
s describes N = 1 SU(2) gauge theories with b(1)(Sigma) chiral multiplets i
n the adjoint. For b(1) = 0, it generalizes to compact manifolds the study
of the phase transition from the non-abelian to the confining phase through
geometrical S-3 flops. For b(1) = 1,the non-abelian and Coulomb phases are
realized, where the latter arises by desingularization of the fixed point
set, while an S-2 x S-1 flop occurs. In addition, an extremal transition be
tween G(2) spaces can take place at conifold points of the CY moduli space
where unoriented membranes wrapped on CP1 and RP2 become massless.