Israeli political crisis defused after last minute deal (Roundup)

Jerusalem - Israeli Premier Ehud Olmert's coalition survived its most serious crisis to date Wednesday, after the opposition decided to withdraw a motion calling for dissolving the Knesset once it became clear the bill would not receive the necessary majority. The bill, submitted by opposition legislator Silvan Shalom, was pulled from the agenda after Olmert's senior coalition partner, the Labour Party, said it would not support it, despite prior promises. The motion was to have come before the plenum early Wednesday afternoon, but is unlikely to have passed without the support of the 19 Labour Party legislators. Had it been adopted, it would have set in motion early elections. Labour's about-face came after Olmert agreed late Tuesday night to a Labour demand to set a date, not later than September 25, for his Kadima party to hold primaries to choose a new leader. Labour Party leader and Defence Minister Ehud Barak, in a speech on May 28, had demanded that Olmert remove himself from the day-to- day running of the country, arguing that a prime minister under investigation for alleged corruption could not give his full attention to the many problems facing the country. Olmert is suspected of taking hundreds of thousands of dollars in cash from an American businessman. He has not yet been indicted and the investigation is continuing. Barak demanded that Olmert's Kadima party appoint a new leader, or else he would work for early elections. Olmert refused to quit, although he did belatedly authorise a Kadima leadership contest, without setting a date. Barak then upped the ante by declaring his support for the opposition bill to dissolve the Knesset. Olmert had threatened to fire any minister who supported the bill, but Barak had refused to withdraw his support for the motion. But the agreement late Tuesday night between Labour Party Secretary-General Eitan Cabal and senior Kadima legislator Tzahi Hanegbi defused the crisis, although another coalition partner, the ultra-Orthodox Shas party, seems to be threatening a new one. Shas, which draws the bulk of its support from lower-income religious Jews, had also threatened to vote for the Knesset dissolution bill unless Olmert agreed to increase child welfare payments. Olmert refused, offering instead a welfare package which Shas rejected. On Wednesday Shas leader Eli Yishai said his faction would not support any coalition which did not increase child welfare allowances. The withdrawal of the 12-seat Shas party from the coalition would leave Olmert at the helm of a minority coalition. But Yishai issued no concrete threat to leave the government. Having bought some breathing space, at least until the next coalition crisis, Olmert on Wednesday afternoon attended a special Kneset debate on the future of the government, and lambasted the opposition, accusing it of angling for an alternative government while failing to come up with an alternative agenda. Opposition legislators, perhaps frustrated that their best chance of unseating the premier was gone, heckled him almost non-stop, barely letting him complete a sentence. But Olmert's days in the prime minister's office could be numbered. It is unclear whether he intends competing in the Kadima leadership race, but should he do so, the demands on him to withdraw are likely to be intense. Similarly, should a new Kadima leader be chosen, the 62-year-old prime minister, one of the most unpopular in Israel's history, can expect fierce pressure to resign the premiership in favour of the new party leader. Foreign Minister Tzipi Livni is the main candidate to succeed Olmert as Kadima leader. Olmert, whose relations with her are strained, is however believed to favour Transport Minister Shaul Mofaz as his successor as party leader.