US embassy cable - 04TELAVIV6146

C O N F I D E N T I A L TEL AVIV 006146 
 
SIPDIS 
 
E.O. 12958: DECL: 12/06/2014 
TAGS: PGOV, PREL, ECON, KWBG, IS, GOI INTERNAL 
SUBJECT: LIKUD CENTRAL COMMITTEE EXPECTED TO APPROVE 
COALITION TALKS WITH LABOR 
 
REF: A. TEL AVIV 6045 
 
     B. TEL AVIV 6007 
 
Classified By: Political Counselor Norman H. Olsen for reasons 1.4 (b,d 
). 
 
1.  (C) Likud's Central Committee is expected to give Prime 
Minister Sharon the green light December 9 to negotiate with 
the Labor Party, United Torah Judaism (UTJ), and Shas to 
rebuild Sharon's minority government, now consisting of only 
Likud's 40 MKs.  Sharon's proposal to negotiate with 
religious parties as well as Labor addresses the August 18 
Likud Central Committee vote against forming any coalition 
comprised of only secular parties.  He will nonetheless 
encounter some Central Committee resistance because of 
Labor's support for disengagement and its opposition to the 
budget and to financial reform.  Defense Minister Shaul Mofaz 
is reportedly scheduled to meet December 6 with Shas Chairman 
Eli Yishai to advance informal coalition talks.  Sharon is 
warning Likud members that failure to add Labor's 19 MKs to 
Likud's minority government will force early elections, 
something Likud MKs want to avoid in order to preserve the 
party's 2002 election windfall of 40 Knesset seats. 
 
2.  (C) Or Pearl, advisor to Likud disengagement opponent 
Ehud Yatom, told poloff December 6 that the strong showing by 
Sharon allies in the November 21 party elections has given 
Sharon the momentum to gain Likud support for coalition 
negotiations with Labor.  Pearl said he is confident that the 
three newly elected party leaders and senior Likud ministers 
-- Central Committee Chair Tzachi Hanegbi, Secretariat Chair 
Yisrael Katz, and Bureau Chief Daniel Naveh -- will vote to 
begin talks with Labor because they do not want early 
elections.  Hanegbi stated publicly, just before Shinui's 
dismissal, that the Central Committee would be inclined to 
allow Sharon to negotiate with Labor.  In addition, a Channel 
2 poll released December 3 in Ma'ariv says some 60 percent of 
Likud members support a coalition with Labor and a religious 
party, and only 13 percent are in favor of early elections. 
 
3.  (C) Labor Party leader Shimon Peres will likely win his 
party's consent for talks with Likud despite significant 
opposition within Labor to Sharon's budget.  Peres has made 
advancing disengagement, and not Labor's economic agenda, his 
focus and priority, but some Labor MKs such as Danny Yatom 
and Colette Avital are intent on opposing the budget as well 
as Finance Minister Netanyahu's economic reforms and cuts in 
social programs, and could demand extensive budget revisions. 
 Peres also told Ha'aretz December 2 that he intends to 
remain in a unity government until the scheduled November 
2006 elections -- not just until disengagement is completed, 
as several Labor members proposed.  If Likud approves 
coalition negotiations with Labor, Labor's Central Committee 
will likely vote December 12 to postpone party primaries. 
Most Labor MKs and party leadership contenders favor 
postponing primaries in order to foil former Prime Minister 
Ehud Barak's efforts to return as party leader. 
 
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