August 22, 2006

Olmert’s coalition hit by row

By Allyn Fisher-Ilan

JERUSALEM (Reuters) - Israeli Prime Minister Ehud Olmert's
coalition government was jolted on Tuesday by a row over
financing the war in Lebanon, a week after a shaky ceasefire
with Hizbollah guerrillas took effect.

Tensions flared after members of Olmert's top coalition
partner, the left-leaning Labor party, balked at supporting a
two billion shekel ($459 million) budget cut to cover military
expenses and help northern Israel recover from the war.

Officials said that without the funds, Israeli reservists,
many of whom are already seething over the army's failure to
crush Hizbollah, cannot be paid.

Parliament's Finance Committee postponed a vote on the
across-the-board spending cut that had been approved by the
cabinet after two Labor members refused to support it.

"The meaning of this is that Israel has no coalition today.
The Labor party isn't a coalition partner you can rely on,"
Avigdor Yitzhaki, the coalition whip in Olmert's centrist
Kadima party, told Israel Radio after the stormy debate.

"Therefore I will propose to the prime minister that he do
an immediate reshuffle to restart the coalition process."

Olmert has been weakened politically by criticism of his
handling of the month-long war, sparked when Hizbollah seized
two soldiers in a July 12 cross-border raid.

Hundreds of reservists back from fighting have launched
protests and called for a broad investigation. Some have
demanded the resignations of both Olmert and Defense Minister
Amir Peretz, who heads the Labor party.


Labor lawmaker Avishai Braverman said he objected to cuts
in welfare spending. "My conscience won't let me raise my hand
in favor of a budget that hurts the weak," he said.

Braverman's remarks sparked divisions within Labor and
media commentators described him as part of a brewing rebellion
in the party to oust Peretz over his handling of the war,
although any leadership contest may take months to play out.

Tourism Minister Isaac Herzog of Labor demanded his peers
support the cut to pay soldiers and help northern Israel
recover from damage done by nearly 4,000 Hizbollah rockets.

"Some of our members in the finance committee made a
mistake today. If someone has decided to break this partnership
(with Olmert) they should let the party decide first," Herzog

Olmert's Kadima party won elections in March after he had
taken over from former prime minister Ariel Sharon, who was
felled by a stroke in January.

He has sought to deflect public criticism over the war by
pledging an investigation into how it was conducted. Many
Israelis feel Hizbollah should have been destroyed.

If Olmert's coalition fell apart, he could be forced to
hold new elections or turn to right-wing lawmakers, notably
former finance minister Benjamin Netanyahu whose calls to crush
Hizbollah have boosted his popularity.