Israeli Quits; Coalition May Be in Danger

Israel’s interior minister, accused of corruption, resigned Wednesday, possibly jeopardizing the parliamentary coalition that Prime Minister Yitzhak Rabin needs to endorse his controversial agreement with the Palestine Liberation Organization on Palestinian self-government.

Rabbi Arye Deri, 34, leader of the ultra-religious Shas Party, announced his resignation after Israel’s Supreme Court ruled that Rabin was obliged as prime minister to suspend or dismiss Deri and a deputy minister after they were indicted on corruption charges.

Deri’s resignation put into immediate question Shas’ continued membership in the governing coalition, and the refusal of the deputy minister to quit increased the political pressure on Rabin.

“There is no doubt this could harm the chances for peace,” Rabin said of Deri’s resignation, which will intensify opposition calls for new elections over the accord with the PLO. Rabin is obliged to accept the resignation after it is submitted to the Cabinet.

The Supreme Court ruling in itself set important new legal and political parameters, imposing ethical standards on the government, Cabinet members and the Knesset (Israel’s Parliament), and striking a more even balance among the three branches of government here.

But it came against the dramatic background of the government’s agreement on Palestinian autonomy in months of secret negotiations with the PLO--an agreement that is under sharp attack from the political right and from many ultra-religious groups in addition to Shas.

“Whether Shas will not be in the government, or will leave the coalition, we will address the political agreement accordingly,” Deri said in a rambling statement as he announced his resignation. “Can we take responsibility for something we are not a partner in? All of that will be made clear in coming days.”

Deri is accused of illegally funneling about $250,000 in government funds into party coffers and religious groups affiliated with Shas, allegations that he strongly denies.

The court also recommended the firing of Rabbi Rafael Pinhasi, another Shas lawmaker who serves as deputy minister for religious affairs and who is also under indictment on fraud charges. Pinhasi refused to resign, saying Rabin would have to fire him.

A group promoting clean government and political reform had gone to court demanding that Deri and Pinhasi be forced out after Rabin refused to fire them last month.

But Shas supporters, who are mostly Sephardic Jews from the Middle East, see the cases against Deri, Pinhasi and other party leaders as persecution by European Jews who resent the growth of the strictly observant Orthodox and fear a loss of power, political and social as well as religious.

Noting the approach of the Jewish New Year, Deri told Rabin in his resignation letter: “I see myself obligated to confess sins committed against my fellow man and against my creator, but I testify before heaven and earth that I took nothing whatsoever from the public treasury. Evil-speakers have told lies about me.”

Shas’ decision, expected today, on whether to leave the government rests with Rabbi Ovadia Yosef, the party’s spiritual leader, who has backed the government’s peace moves. Even if Shas quits Rabin’s coalition, it could support the agreement from outside the government.

“The subject (of the peace negotiations) is too important--fateful in fact--for the people of Israel, for the Jewish nation,” for it to be a matter of politics, Deri told a press conference. But Shas, he continued, would have to consider practical politics in deciding whether to back the accord.

With Shas, Rabin’s coalition has 62 seats in the 120-member Parliament and can depend on five more votes from Arab and Communist parties.

The Knesset is scheduled to begin debating the settlement plan today, but the accord will not come up for formal approval until it has been signed, a step expected next week.