Likud, Labor Talk of Forming New Coalition

Israel’s archrival Likud and Labor parties held a series of intense negotiating sessions over the weekend with the aim of forming a broad-based government, and some officials reported slight progress in the talks Sunday.

But the officials cautioned that no agreement has been reached and said the flirtation will probably drag on for at least two more days.

A joint Likud-Labor government could greatly affect Israel’s position on Middle East peace talks, an issue that has taken on new importance since last week’s Palestinian declaration of an independent state.

Likud Won Most Seats

Because no party won a majority in the Nov. 1 parliamentary election, a coalition must be shaped to form a government. Likud won the most seats--40--and was given the first chance at forging a governing coalition. Under Israeli law, Likud still has more than a month left before it must give way to another party.

Labor won 39 seats in the voting. Sixty-one seats are needed for a majority in the 120-member Knesset, Israel’s Parliament.

In the current talks, the rightist Likud, headed by Prime Minister Yitzhak Shamir, has the upper hand over center-left Labor, led by Foreign Minister Shimon Peres. Likud has attracted enough potential allies among far-right and religious parties to form a government and can do without Labor if necessary.

But Shamir has expressed a preference for having Labor in the government. Last week, he appealed to Labor to “help meet the severe diplomatic, military and economic challenges that lie ahead.” On Sunday night, Shamir said, “I want a broad government very much, but the chances are slim.”

A Likud-Labor marriage would at least have the benefit of familiarity. The two parties have shared power in a national unity government since 1984, with Shamir and Peres alternating in the prime ministership.

No Rotation

This time, the arrangement would be different: If talks are successful, Labor would join a Likud-led team headed by Shamir; there would be no rotation in the top spot, officials of both parties say.

A high-ranking Labor official put the chances of the rivals joining forces at “about 50-50” and said this was an improvement over a week ago when the first contacts were made.

At least one obstacle to such a partnership was cleared away over the weekend, Israel Radio reported. Likud has offered Labor control of two of the three top government ministries--defense, finance and foreign. Labor Party officials insist on having two of the posts as a face-saving concession.

In the holdover unity government, Peres is foreign minister and the No. 2 Labor official, Yitzhak Rabin, is the minister of defense.

Although Peres’ future role is unclear, Rabin would probably remain defense minister. His handling of the uprising in the West Bank and Gaza Strip is considered tough enough to suit hawkish Likud, political observers here say.

Joint Rule Pushed

Rabin has openly promoted joint rule, and, as an inducement, has expressed a willingness to drop Labor’s key campaign proposal on Middle East peace talks. Before the election, Peres pledged to convene an international peace conference as a means of ending the Israeli-Palestinian conflict.

But on television last week, Rabin said Labor should be willing to “give Likud a chance to advance the peace process according to their understanding.” Likud opposes an international conference and has shied away from outlining how it might reach a peace agreement with Palestinians and Israel’s Arab neighbors.

The current government has united on the issue of the Palestinian statement of independence. Shamir, Peres and Rabin have all warned that it is a trick. Despite an intense Israeli diplomatic campaign, more than 30 foreign governments have endorsed the proposed state, including Egypt, the only Arab country that also recognizes Israel.

Peres is portrayed as having little enthusiasm for joining a Likud government, but Labor sources say that he may be enticed if he can remain foreign minister. Even the Finance Ministry, although it would be a comedown for him, has some attraction for Peres. The Finance Ministry controls funds that could be funneled to farm cooperatives and state-linked industries that are traditional sources of support for the Labor Party.

15 Parties

Since Nov. 1, Israeli politicians have held almost daily meetings with each other to try to build a Knesset majority. With 15 parties in the running, including some that won as few as one or two seats, the deck is being endlessly reshuffled.

Political observers here see Labor’s impetus for joining Likud as the last gasp of ambition for the two top party leaders, Peres and Rabin. Peres is under fire for having led Labor to defeat in the last vote and only a position in government may save him from being replaced as party leader. Rabin is said to believe this is his last chance to reach a high position in any government.

Many second-tier Labor members are urging the leaders to refuse any Likud offer. “The time has come to teach the public that there are differences between Labor and Likud,” said Peres aide Yossi Beilin.

Some Laborites also think a rightist-religious government will fall on its own because so many diverse parties and varied personalities would have to be included. For Shamir, one attraction of a partnership with Labor presumably would be having only one partner to deal with, not several.

Religious Party Role

A Likud-Labor agreement might solve an embarrassing problem for Shamir. As part of a deal to attract religious parties to his side, Shamir assured them that a proposal to make Orthodox rabbis in Israel the sole authority over Jewish conversions would become law.

Since then, Shamir and other Israeli leaders have been bombarded by complaints from Jews residing abroad, notably in the United States. The critics argue that the measure, known popularly as the “Who is a Jew law,” would diminish the status of non-Orthodox rabbis. The vast majority of the 6 million Jews in the United States belong to either Reform or Conservative congregations.

Leading U.S. Jewish groups hinted that passage of the law could hurt the moral and financial support of U.S. Jews for Israel.

If Likud and Labor form a coalition, Shamir’s pledges to the religious parties on the “Who is a Jew” question would be nullified.