As Peace Talks Stall, Midterm Crisis Stirs Discord in Israeli Government : Mideast: Renewed violence prompts calls to renegotiate PLO accord. Prime minister calls two Cabinet meetings to address frustrations.

The government of Israeli Prime Minister Yitzhak Rabin is suffering through a midterm crisis with its push for peace with the Arabs stalling, its ministers bickering publicly and its prospects for reelection increasingly uncertain.

Doubts about the self-government agreement that Israel signed last year with the Palestine Liberation Organization have spread through the Cabinet and the leadership of the ruling Labor Party as radical terrorism has increased, and many are suggesting that the accord be renegotiated.

Prospects for peace with Syria, the key to ending the Arab-Israeli conflict, diminish day by day, and Rabin is now warning that the two countries have less than a year left before Israel heads into its next elections and thus will be unable to make the compromises necessary for a deal.

With their 1992 election pledge of “peace with security” a virtual taunt now, Labor Party ministers are quarreling over the government’s course in the peace negotiations, and Rabin has scheduled two full Cabinet meetings, on Sunday and Wednesday, to discuss Israel’s next steps in the talks.

“We have two years left before the next Knesset (parliamentary) elections, and if we were wrong in rushing to implement the peace moves we should say so without shame,” Labor Party Secretary General Nissim Zvili said this week, acknowledging the widespread disappointment with the search for peace.

“The public is not ready to participate in the risks the government is ready to take in order to advance peace,” Zvili added, saying that Rabin would now be guided by the desire of Labor’s supporters for “stability,” meaning an end to devastating terrorist attacks by Palestinian radicals opposed to the agreement with Israel.

“These voters gave the peace process a chance,” Zvili continued, “but the breakthrough with the PLO is facing difficulties that the government cannot answer.”

Rabin himself was described in the influential newspaper Haaretz on Friday by political commentator Uzi Benziman as having concluded that he will have to abandon negotiations with the PLO and look for another way to proceed in which Israeli security can be assured.

Although primarily a result of the problems in the peace negotiations, the growing malaise reflects a deeper sense within the Cabinet and Labor Party as well as the country that, however narrow a mandate Rabin won in the 1992 elections, he should have done more with it.

“Were the elections held this month, we would be turned out, no question about it,” one minister said this week. “People are angry that the peace process is not final and complete, but rather flawed at this moment. . . .

“At the same time, we can’t tell them how much better off they are now, not with inflation at 15%, not with bank interest rates up to 19%, not with the stock market down and not with the price of tomatoes so high that many families cannot afford what for us is virtually a staple. Unemployment is down, it’s true, but more people are below the poverty line.”

Nahum Barnea, the veteran political commentator of Yediot Aharonot, the country’s biggest newspaper, argues that this is all part of the midterm crisis that for more than two decades has hit virtually every Israeli government about two years after it comes to power and as it looks two years ahead to the next elections.

With the current government, however, the crisis--more a crisis of confidence than anything else--jeopardizes efforts to settle the Middle East conflict through peace treaties between the Jewish state and its Arab neighbors.

“This midterm panic stems from the feeling that Rabin no longer navigates,” the liberal Haaretz said in an editorial this week. “The ups and downs in the negotiations with Syria and the absences of a clear government position are one example. . . .

“There is a feeling that after a period of achievements the peace process is stuck. But experience shows it is wrong to examine the chances for peace on the basis of public opinion. The leadership’s role is to give people confidence, not to whimper. . . . Rabin should not succumb to defeatism. Interrupting the peace process won’t help him win the elections.”

The blame for all this is itself bitterly debated within the government and Labor Party, tearing away at the cohesion that Rabin needs for the crucial decisions ahead in Israel’s search for peace.

So consuming has the Cabinet’s squabbling become that Haaretz commentator Yoel Marcus described the Rabin government as “at daggers drawn and likely to collapse at any moment.”

Another political correspondent compared the infighting to a personal financial scandal that brought down Rabin’s last government in 1977.

Shimon Sheves, Rabin’s top aide, has angered a number of ministers with his blunt criticism of their performance. They, in turn, have mounted a campaign against Sheves, with the housing and finance ministers reportedly telling their staffs not to cooperate with him.

In the latest developments, Zvili denounced Sheves, accusing him of “sliding into personal quarrels and animosities that can only hurt Labor’s cause.”

Rabin, defending Sheves at the last Cabinet meeting on Sunday, scolded several ministers and reduced Labor Minister Ora Namir to tears, thus bringing the weekly ministerial session to an abrupt end. Hagai Meirom, a Labor Party leader in the Knesset, then rebuked Rabin for his “loss of self-control.”

“The rivalry (between the ministers and Sheves) is about power, access to Rabin, about getting credit and about honor,” Barnea wrote Friday in Yediot Aharonot, adding that “the relationship between Sheves and his ego is like the relationship between an alcoholic and the bottle.”

But there were serious doubts about Rabin’s ability to end the feuding, to reassert his leadership and to stay the difficult course on which he has set his government.

Some Rabin advisers described the 72-year-old prime minister as “very upset” by the tough problems he is facing, particularly in the peace talks, and were expressing doubts about how he would manage.

Toward the end of the week, Rabin launched an attempt to pull the government out of its “midlife crisis,” scheduling the two Cabinet meetings, mobilizing his loyalists in the Labor Party’s central committee and urging upon Israeli editors a “balanced assessment.”

“People are griping about nonsense,” Rabin told the central committee, declaring that his government was not getting credit for economic improvements and that patience was required for the ups and downs of peacemaking. “Things are far better than they might seem. . . . How bad can the situation be when so many cars are jamming the roads? No sooner do you build new roads than they are jammed. Is this an indication of a low standard of living?”

Avraham Shohat, the finance minister, similarly urged the party to emphasize the government’s economic achievements to counter pessimism over negotiations with the Palestinians and Syria.

“Things are far better than they are made out to be,” Shohat declared, “and there is no justification for this foul mood that is gripping us. We have every reason to be proud.”