Confusion Reigns in Search for New Leader : Israel: A religious party whose votes brought down Shamir now says it wants his Likud Party to head the government.

Israel’s search for a new prime minister sputtered into confusion Sunday.

The religious party whose votes were the key to bringing down Prime Minister Yitzhak Shamir in a no-confidence motion last week recommended that Shamir’s Likud Party be chosen to lead a new government.

Leaders of the Shas party made the suggestion to Chaim Herzog, the country’s largely ceremonial president, who is in charge of nominating a candidate to form a new ruling coalition.

At first blush, the move by Shas, an Orthodox Jewish party, appears to be a blow to the escalating hopes of Shimon Peres, leader of the Labor Party, to head a new coalition.

Or is it? Shas officials were careful not to name Shamir in their recommendation. That was taken to mean that if Shamir continues to lead Likud, Shas could bolt to Labor and Peres. As of Sunday, Shamir remained head of Likud, and the party recommended to Herzog that he be chosen to re-establish a coalition.

Also, Shas’ decision to recommend Likud was conditioned on its accepting a U.S.-designed plan for peace talks with Palestinians. For the moment, that seems unlikely. Shamir fell because he shunned the plan, and other Likud leaders also oppose the proposal.

In any case, it all rests with Herzog, who is supposed to determine which politician can best piece together a government from Israel’s fragmented political parties. He will continue to take recommendations from leaders of numerous minor parties today.

Labor has already recommended Peres.

The Shas move highlights the Byzantine volatility of Israeli politics. Just last Thursday, Shas, under the influence of its spiritual mentor, Rabbi Ovadia Yosef, withheld from Shamir the five necessary votes in Parliament to turn back a no-confidence measure put forward by Peres.

Shas abandoned Shamir after he refused an ultimatum from Shas to accept Washington’s peace plan.

Sunday’s return to Likud’s side--if not Shamir’s--reflects a need to mollify Shas voters who are viewed to be generally in tune with Likud’s populist and nationalist platform, political observers said. One Shas member of Parliament, Absorption and Immigration Minister Yitzhak Peretz, resigned from the party Sunday in protest over Shas’ policy.

Shas is hoping that Likud “will come to its senses” and accept the American peace plan and thus open the way for Shas to once again align itself with Likud, an analyst for Israel Radio said.

“What’s going to happen when (Likud) says no?” the analyst wondered. “Then it’s possible (for Shas) . . . to say to its voters, ‘We have to go with someone else,’ ” presumably Labor.

The Shas flip-flop was not the only surprise of the weekend.

Within Likud, conservative hard-liner Ariel Sharon, who has spent weeks trying to undermine Shamir’s authority among the party faithful, rushed to defend Shamir’s leadership. Sharon said that he is embracing Shamir because the prime minister, like himself, is opposed to taking up Washington’s peace plan.

In Labor, rumors circulated that former Defense Minister Yitzhak Rabin will challenge Peres for the party leadership if Peres fails to gain power. Under this scenario, Rabin would seek to be a candidate to form a government should both Peres and Shamir fall short. Rabin is viewed as less dovish than Peres, and, according to this logic, perhaps more acceptable to Likud.