Israel’s Foreign Minister Resigns, Deepening Crisis

Israeli Prime Minister Benjamin Netanyahu’s shaky governing coalition was thrust into its deepest crisis to date Sunday, with the resignation of Foreign Minister David Levy pushing it a step closer to political paralysis or collapse.

The departure of Levy, 60, a leading moderate within Netanyahu’s amalgam of right-wing and religious parties, also is likely to hurt the government’s ability to make progress on the most critical issue before it--the U.S.-sponsored peace process with the Palestinians.

In announcing he was quitting the government in a disagreement over the 1998 budget, Levy, a longtime rival of Netanyahu, bitterly attacked the prime minister for allowing the peace process to deteriorate and for ignoring the growing problems of Israel’s poor and unemployed, the core constituency of Levy’s Gesher Party.

Netanyahu, however, reacted with relative equanimity--at least in public--to the most serious blow yet to his government in 19 months of seemingly perpetual crisis. He urged Levy to reconsider but declared that the coalition will survive the latest challenge and remain in power “until the year 2000, or later.”

Only his government, the prime minister told a news conference, can hope to both obtain a “secure peace” with the Palestinians and solve the economic problems that helped provoke Levy’s resignation. Netanyahu also issued a warning to those who might be hoping for his downfall, declaring that a government led by the leftist Labor Party would immediately return Israel to its pre-1967 borders.

Levy’s resignation, contained in a letter delivered to Netanyahu’s office Sunday evening, does not take effect for 48 hours, meaning that the foreign minister could still back down. But most analysts, while noting that the volatile Levy has frequently threatened to resign, said that his angry denunciation of government policies in Sunday’s announcement left him no escape clause. Most expected him to follow through.

Even without Levy and his five-member Gesher faction, Netanyahu said, his government will succeed in passing the 1998 budget. A vote on the $58-billion spending package was set for today but could still be delayed. The government has already missed one deadline but can take until March 31 to pass the budget package.

“I believe this government will continue its work, its important work,” Netanyahu said. His government, he added, is “a lot more stable than is believed.”

If Levy holds to his plan and, as expected, pulls his Gesher Party members out of the government as well, Netanyahu will have a paper-thin 61-59 majority in the 120-member Knesset, or parliament. That would leave him increasingly vulnerable to the demands of the right-wing and religious parties that remain in what has been an eight-party coalition.

The most immediate casualty could be the recently intensified U.S. effort to revive the Israeli-Palestinian peace process, which has been at an impasse since March. The Clinton administration has been pressing Netanyahu to come up with specific ideas for moving the peace talks forward, including a detailed proposal for a further Israeli pullback from the West Bank. Netanyahu, who faces strong opposition to the redeployment from hard-line coalition members, had tried to get through the budget battle first.

The White House confirmed on Sunday that Netanyahu and Palestinian Authority President Yasser Arafat have been invited to separate meetings with President Clinton later this month in an effort to push the process forward. In another indication that the United States still intends to press Netanyahu to make progress, despite the political crisis, U.S. peace envoy Dennis B. Ross is expected to arrive in the region Tuesday. But it is unclear how much progress could be made, especially if the budget is not approved within the next few days.

Levy’s decision to quit followed a threat he made Thursday to do so if the prime minister did not keep earlier promises to help Israel’s poor and unemployed, particularly in the less-affluent cities of the south. Netanyahu responded to the threat by delaying the budget vote and managing to come up with a reported $100 million to meet Levy’s demands.

Levy acknowledged at his news conference Sunday that Netanyahu had tried to satisfy him with help for low-income cities, and with more housing and funding for the poor, but he scornfully dismissed the effort as not enough. “The partnership has failed,” he said.

His lip curled in anger, Levy also said he was “fed up” with trying to move forward, “alone” among his Cabinet colleagues, toward peace with the Palestinians and responsible social policies for Israel.

Commentators speculated that Levy, with an eye to possible elections, chose to resign in a crisis precipitated by the budget and to focus at his news conference on economic issues more than the peace process because of his awareness that those issues would resonate most strongly with the lower-income, predominantly Sephardic Jews who make up his most loyal constituency.

Leaders of the opposition Labor and Meretz parties, meanwhile, welcomed Levy’s departure from the government with barely disguised pleasure. Yossi Sarid, head of the far-left Meretz Party, predicted that Gesher will prove but the first domino in the downfall of a dying government.

Labor Party leader Ehud Barak called for early elections, saying that Israelis “deserve” them, and predicted that the Netanyahu government will come to an end before the year is out.

In the wake of Levy’s announcement, Israeli commentators and political analysts pointed to several possible scenarios:

* Courted by Netanyahu and other members of the government, Levy could opt to return to the coalition, ending the immediate crisis. In light of Levy’s bitter exit speech, most analysts said this was unlikely but not impossible, given what many government insiders view as his tendency toward theatrics.

* The government could limp along, its ability to act on issues ranging from the peace process to economic matters paralyzed by an increasingly fragile and fractious coalition. Progress on peace talks, in particular, could be held hostage to narrow political interests.

* Deciding that his remaining coalition is untenable, Netanyahu could decide to call for new elections himself. But this possibility carries heavy political risks; rather than return to power with a stronger mandate, Netanyahu and his Likud Party could lose out to Labor, said Gerald Steinberg, a political science professor at Tel Aviv’s Bar Ilan University.

* Other small parties in the coalition could decide to bolt, meaning that the opposition could gain the 61 Knesset votes required to bring down the government and hold early elections. Steinberg said this could occur if a party such as the centrist Third Way believes that the peace process is irrevocably stuck or if either the Third Way or any other small party, sensing that early elections are inevitable, decides to seize the initiative and spark the vote itself.

* Finally, Netanyahu could be forced to stand for election alone, without a parliamentary election, if 80 Knesset members vote to bring him down. The election would be held within 90 days of the government’s fall.

Steinberg and other analysts said it was too early to tell whether Levy’s resignation would topple Netanyahu’s government after a year and a half in which it has survived numerous crises. What was clear, several said, was that the departure of Levy, one of the Netanyahu Cabinet’s most experienced politicians, represented a turning point for the government and will make it even more difficult than before for it to reach tough decisions, particularly on the peace process.

Even before Levy announced his resignation, the crisis he provoked by threatening to step down had forced Netanyahu into a “two-front war,” forcing him to do battle on the budget and the peace process at the same time, columnist Hemi Shalev wrote in the daily Maariv.

But Shalev said the crisis was of Netanyahu’s own making, with “the contradictory promises that he has scattered . . . beginning to boomerang. . . . It may be that, like a cat, he has nine lives, but nobody can know when even these will not be enough.”