LIKUD CENTRAL COMMITTEE EXPECTED TO APPROVE

C O N F I D E N T I A L TEL AVIV 006146

SIPDIS

E.O. 12958: DECL: 12/06/2014
TAGS: PGOV PREL ECON KWBG IS GOI INTERNAL
SUBJECT: LIKUD CENTRAL COMMITTEE EXPECTED TO APPROVE
COALITION TALKS WITH LABOR

REF: A. TEL AVIV 6045


B. TEL AVIV 6007

Classified By: Political Counselor Norman H. Olsen for reasons 1.4 (b,d
).


1. (C) Likud's Central Committee is expected to give Prime
Minister Sharon the green light December 9 to negotiate with
the Labor Party, United Torah Judaism (UTJ),and Shas to
rebuild Sharon's minority government, now consisting of only
Likud's 40 MKs. Sharon's proposal to negotiate with
religious parties as well as Labor addresses the August 18
Likud Central Committee vote against forming any coalition
comprised of only secular parties. He will nonetheless
encounter some Central Committee resistance because of
Labor's support for disengagement and its opposition to the
budget and to financial reform. Defense Minister Shaul Mofaz
is reportedly scheduled to meet December 6 with Shas Chairman
Eli Yishai to advance informal coalition talks. Sharon is
warning Likud members that failure to add Labor's 19 MKs to
Likud's minority government will force early elections,
something Likud MKs want to avoid in order to preserve the
party's 2002 election windfall of 40 Knesset seats.


2. (C) Or Pearl, advisor to Likud disengagement opponent
Ehud Yatom, told poloff December 6 that the strong showing by
Sharon allies in the November 21 party elections has given
Sharon the momentum to gain Likud support for coalition
negotiations with Labor. Pearl said he is confident that the
three newly elected party leaders and senior Likud ministers
-- Central Committee Chair Tzachi Hanegbi, Secretariat Chair
Yisrael Katz, and Bureau Chief Daniel Naveh -- will vote to
begin talks with Labor because they do not want early
elections. Hanegbi stated publicly, just before Shinui's
dismissal, that the Central Committee would be inclined to
allow Sharon to negotiate with Labor. In addition, a Channel
2 poll released December 3 in Ma'ariv says some 60 percent of
Likud members support a coalition with Labor and a religious
party, and only 13 percent are in favor of early elections.


3. (C) Labor Party leader Shimon Peres will likely win his
party's consent for talks with Likud despite significant
opposition within Labor to Sharon's budget. Peres has made
advancing disengagement, and not Labor's economic agenda, his
focus and priority, but some Labor MKs such as Danny Yatom
and Colette Avital are intent on opposing the budget as well
as Finance Minister Netanyahu's economic reforms and cuts in
social programs, and could demand extensive budget revisions.
Peres also told Ha'aretz December 2 that he intends to
remain in a unity government until the scheduled November
2006 elections -- not just until disengagement is completed,
as several Labor members proposed. If Likud approves
coalition negotiations with Labor, Labor's Central Committee
will likely vote December 12 to postpone party primaries.
Most Labor MKs and party leadership contenders favor
postponing primaries in order to foil former Prime Minister
Ehud Barak's efforts to return as party leader.

********************************************* ********************
Visit Embassy Tel Aviv's Classified Website:
http://www.state.sgov.gov/p/nea/telaviv

You can also access this site through the State Department's
Classified SIPRNET website.
********************************************* ********************
CRETZ