News Analysis: Sharon appears loser as Netanyahu ends latest crisis

JERUSALEM — Ariel Sharon has lost — at least for now.

In a move aimed at ending a drawn-out coalition crisis, Israeli Prime Minister Benjamin Netanyahu bypassed the veteran Likud hawk to name Ya'acov Ne'eman this week as finance minister.

It appears that the move has saved Netanyahu's government from imminent collapse, but the premier is still faced with the daunting task of restoring confidence in his leadership.

He came forward with several new Cabinet appointments this week that he hoped would appease disgruntled government ministers.

The appointments came one day after Netanyahu survived another no-confidence vote in the Knesset. Members rejected the motion by a vote of 48-39.

At the same time, however, it is not clear how Sharon, who remains the national infrastructure minister, will respond to the snub. He now joins a growing list of prominent Likud members who have been at odds with the prime minister since he took office a year ago.

Ever since the finance position was vacated last month by Netanyahu rival Dan Meridor — in a dispute over foreign currency reforms — Sharon had been seen as the leading contender for the job.

But Foreign Minister David Levy, already irate over his belief that the prime minister was excluding him from political decision-making, balked at the prospect of Sharon taking over the influential portfolio and becoming a member of the "kitchen cabinet," which sets peace policy.

Levy threatened to quit if his leading role in the peacemaking efforts was not ensured by the prime minister, and demanded that the kitchen cabinet be disbanded on the premise that it sowed discord among ministers who were not members.

If Levy had left, taking his colleagues with him, Netanyahu would have been left with a razor-slim majority in the Knesset.

After a series of meetings with Levy, Netanyahu bowed to the pressure and agreed to abolish the inner forum.

However, in a gesture to Sharon, the Prime Minister's Office said Netanyahu would still consult "from time to time" on important matters with senior ministers — Levy, Sharon and Defense Minister Yitzhak Mordechai.

Ne'eman served as justice minister for two months until last summer, when he stepped down amid a criminal investigation into allegations of perjury and obstruction of justice.

Ne'eman was acquitted by a court in May. However, his reinstatement to his old job was blocked by his replacement as justice minister, Tzachi Hanegbi, who refused to step aside.

In other new Cabinet appointments, Netanyahu named coalition chairman Michael Eitan of the Likud as science minister.

That portfolio had been vacant since January, when Likud Knesset member Ze'ev "Benny" Begin resigned in protest over the Hebron agreement with the Palestinians.

In order to resolve a fight over portfolios between Eitan and Likud Knesset member Silvan Shalom, the Science Ministry was made a rotating portfolio, which Shalom will assume in a year. Until then, Netanyahu appointed him deputy defense minister.

After the Knesset approved the new Cabinet appointments on Wednesday, Netanyahu said he was sure the government would face more difficulties, but that the new appointments would strengthen the Cabinet.

"I'm sure there will be many difficulties and many challenges," he told Israel Radio. But he said his government was now "stronger and stabler" and "we can complete the mission we've been given."

Netanyahu secured final coalition approval for the Cabinet appointments after appeasing coalition partners with various pledges.

Those promises could cost the Treasury more than $800 million. Israeli newspapers report that the agreements call for increased spending on education and social services.