Israeli Minister Offers to Quit; Coalition Put in Peril

Israel’s finance minister offered to resign today to save the country’s shaky coalition government, but his Cabinet allies said his departure would lead to the government’s collapse and a general election.

Labor Prime Minister Shimon Peres demanded the dismissal of Finance Minister Yitzhak Modai of the right-wing Likud bloc, who had charged Peres was “flighty” and did not understand economics.

Modai told a news conference today that “if Peres wants, I will return to him the finance portfolio and that will be my contribution to the people and the nation.”

Peres made no comment on Modai’s offer. But Foreign Minister Yitzhak Shamir, the Likud leader due to swap jobs with Peres in October under their 1984 coalition agreement, said Modai’s resignation would topple the government.

“He (Peres) should know, without a hint of hesitation, if he insists on the finance minister’s dismissal, Likud will not participate in this government,” Shamir told Likud ministers.

Modai told reporters after the meeting, “I heard my friends.” He refused to say whether he still planned to present his resignation at Sunday’s weekly Cabinet meeting.

Likud’s Moshe Arens, a minister-without-portfolio, told reporters only Peres could prevent the government’s collapse.

“I think it’s clear to everyone that the man who brought on this crisis is Mr. Peres, and he is the only one that can get us out of it,” Arens said.

Peres has offered to give Modai another Cabinet post if he steps down.

The prime minister has been under pressure from his Labor Party to abrogate the coalition agreement before the job rotation with Shamir and call new elections or try to form a narrowly based Cabinet.