In a nationally broadcast speech, Labor leader Shimon Peres told the 1,300 members of the center-left party's Central Committee that Shamir is stalling and will not respond to U.S. peace proposals.
The Labor members today approved a vaguely worded resolution, with only one member dissenting. The resolution authorized the party leadership and the 39 Labor members in the 120-seat parliament to "determine the parliamentary moves necessitated by the situation."
That gave Peres a mandate to join with other, smaller parties to support a no-confidence motion expected to be brought before Parliament Thursday, unless a compromise can be worked out in the meantime.
A no-confidence vote would bring down the 15-month-old government.
"We have reached a conclusion that Shamir will try to run a policy of saying neither yes or no. He will try to avoid the decision and will pull us into the desert of indecision," said Peres, who is finance minister and vice premier.
On Sunday, Shamir refused to allow the 12-member Inner Cabinet to vote on a U.S.-backed peace plan, which aims to set up preliminary peace talks between Palestinian and Israeli delegations in Cairo.
Before the Labor announcement, Religion Minister Zevulun Hammer met separately with Israel's four top political leaders--Shamir, Peres, Foreign Minister Moshe Arens of Likud and Defense Minister Yitzhak Rabin of Labor--to try to mediate a compromise, Israel radio said.
But Shamir aide Avi Pazner said there seems to be little room left for agreement.
"It looks like the two parties are going for a showdown Thursday. It would take a miracle to reach a compromise before that," he said.