- The Washington Times - Thursday, October 31, 2002

JERUSALEM Israeli Prime Minister Ariel Sharon's government collapsed yesterday when his defense chief and other ministers from the Labor Party quit in a dispute over funding for Jewish settlers.
The demise of the 20-month alliance between Mr. Sharon's Likud Party and Labor makes a general election likely in the coming months, even as war looms in the Persian Gulf and fighting with the Palestinians continues with no end in sight.
To continue to rule, Mr. Sharon must cobble together a narrow majority in parliament based on a new alliance with small parties that are far more hard-line than his own Likud, including religious parties and splinter factions.
The Labor ministers' resignations do not take effect for 48 hours under Israeli law, giving both sides a grace period to ponder a compromise.
But analysts said that reconciliation appeared unlikely, given the acrimony of yesterday's exchanges.
Defense Minister Binyamin Ben-Eliezer led the revolt at the end of a day of marathon talks in which Likud and Labor teetered between divorce and reconciliation.
The dispute was over a Labor demand to redistribute $147 million from subsidies for Jewish settlers in the West Bank and the Gaza Strip to poorer groups inside Israel. As expected, Mr. Sharon managed to win enough votes to defeat the Labor proposal and pass a budget.
But he now is expected to call elections early in the new year instead of November 2003.
Addressing parliament before a preliminary vote on next year's budget, Mr. Sharon lambasted Mr. Ben-Eliezer for stopping just a few words short of a compromise.
"Over this you are breaking up the unity government? I ask you," Mr. Sharon roared as he slammed his hand on the podium.
"At this critical time for the Israeli economy, what is required of us, both in the coalition and the opposition, is to vote on behalf of the budget. Enough. There is a limit to the disgrace," he said.
Parliament must vote two more times to pass the budget.
Mr. Ben-Eliezer rejected charges that he used the spat over settler subsidies an insignificant fraction of the spending plan as an excuse to move into the opposition, where he could improve his chances of beating a challenge to his leadership of the Labor Party expected next month.
"I understand the prime minister didn't expect this. He expected we would continue to be his lackeys," Mr. Ben-Eliezer said after the breakdown.
"If the Labor Party is so important and stability is so important, why didn't [Mr. Sharon] step in our direction?" he said.
Mr. Ben-Eliezer isn't the only one facing a leadership challenge.
A general election will force Mr. Sharon into a pre-election showdown against former Prime Minister Benjamin Netanyahu, who is still widely popular among the Likud faithful.
The winner of that contest would be the favorite to become the next prime minister, according to opinion polls, which show Likud winning the largest number of votes in the next election.
Despite the daily carnage with the Palestinians and a painful recession, Mr. Sharon's unity coalition was preferred by a majority of Israelis who saw neither Labor nor Likud as capable of providing an answer to the Palestinian uprising.
"The coalition was incoherent because it was not based around a policy," said Ron Dermer, an Israeli political consultant. "It was unity for the sake of unity."
National elections have been held three times since 1996 because of the unstable coalitions created by the country's election system.
"We must fight terror, but this is the day when we have to present a diplomatic horizon," Mr. Ben-Eliezer said. "The prime minister is unable to present a diplomatic horizon."
Foreign Minister Shimon Peres, who led Labor for much of the past two decades and has been a key supporter of the unity government, tried to convince Mr. Ben-Eliezer to back down.
When the attempt failed, Mr. Peres resigned along with Mr. Ben-Eliezer and four other Labor Party ministers.
In Washington, White House Press Secretary Ari Fleischer said, "The United States views the events in Israel as part of Israel's internal democratic process, and we have no comment beyond that."

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