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Israeli governing coalition collapses

Israeli Defense Minister Binyamin Ben-Eliezer informs Labor Party members of his resignation in Jerusalem on Wednesday.

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Sharon battles with resignations: CNN's Jerrold Kessel reports. (October 30)
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JERUSALEM (CNN) -- Israeli Prime Minister Ariel Sharon's national unity coalition collapsed Wednesday when the opposition Labor Party bolted and voted against a new Israeli budget.

Israeli Defense Minister Binyamin Ben-Eliezer, leader of the Labor Party, said his faction had no choice after Sharon refused to compromise over Labor's demand that money earmarked for Jewish settlements be diverted to social programs.

Sharon of the Likud party condemned Labor's arguments and defections as "nonsense" based on politics.

"On this you are breaking up the unity government?" he asked in a speech in the Knesset, the Israeli parliament.

Sharon said he had agreed to form a committee that would report back by November 10 on Labor's concerns.

"We did everything we could. We will continue to lead the country with responsibility and judiciousness" without Labor, Sharon said.

Ben-Eliezer turned in his resignation when talks collapsed, and was followed by the remainder of Labor's ministers. The resignations will take effect within 48 hours.

Labor had proposed that about $147 million earmarked for the Jewish settlements be diverted to fund social services benefiting pensioners, one-parent families, students and low-income locales.

Even without Labor, Sharon's austerity budget passed on its first reading 65 to 45 with two abstentions.

Ben-Eliezer said he thought Sharon would have agreed to Labor's demands. "But that is not what happened," he said.

"I wanted the public to know we were making an effort," Ben-Eliezer said. "We came out after an entire day with promises, but nothing in our hands. Nothing. And, therefore, I was forced to recommend my faction vote against the budget."

Sharon said he refused to divert funds from the settlements "that would harm an entire sector of the population."

With Labor's 24 members out of his government, Sharon now lacks a majority of votes in the 120- member Knesset. He faces a no-confidence vote in the Knesset on Monday.

To stay in power without Labor, Sharon has two choices -- form a new coalition with right-wing, religious parties or call for new elections.

Sharon could still try to negotiate a new deal with Labor before the resignations take effect, but that possibility was considered extremely unlikely by political observers.

Before the vote, Sharon said legislators must vote for the budget to show Israel's allies -- including the United States -- that it is serious about putting its economy back on track.

"I will not tolerate games or political party tricks," Sharon said, according to the Cabinet secretariat. "Whoever does not vote in favor of the budget cannot be part of the government," he vowed.

Silvan Shalom, the Israeli finance minister and a member of Likud, blamed Ben-Eliezer for the crisis, saying the Labor Party leader was playing "local politics" in the face of party primary elections in two weeks.

Labor ministers blamed Sharon, who refused a compromise deal before the collapse. The proposed deal was believed to contain language promising that social programs would have parity with funding given to Jewish settlements.

Saeb Erakat, a member of the Palestinian Authority Cabinet, said the Palestinian Authority considers the split in the government an internal matter. But he added, "It's ironic that if the Likud-Labor coalition would have continued, it would have been at the expense of the peace process and the Palestinian people through settlement activity and confiscation of land.

"And on the other hand, if there will be a Likud-right-wing coalition it would also be at the expense of the peace process and the Palestinian people through settlement activity and confiscation of land. It's unfortunate that the Israeli political arena is moving further and further away from the peace process."

Sharon has been an ardent supporter of settlements.

Israel's settler community, which numbers some 200,000 in the West Bank, is seen by many Israelis as essential for Israel's security -- as a first line of defense from the east. Jewish settlements in Gaza are less populated but still flashpoints in the Israeli-Palestinian conflict.

The settlements have become -- over the years -- a main issue in the Israeli-Palestinian peace process.

Palestinians see the settlements as an instrument of Israeli occupation aimed at dividing any future Palestinian state into noncontiguous portions.

At the Jewish settlement of Hermesh on the West Bank, a Palestinian man shot and killed three Israelis and wounded three others Tuesday before Israeli forces shot him dead, the Israel Defense Forces said. (Full story)

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