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JERUSALEM (JTA) — Israeli Prime Minister Ehud Barak survived his first major coalition crisis last week — one that had threatened to leave his government with a minority in the Knesset and to hinder Middle East peace talks.

On Dec. 28, the fervently religious Shas Party backed down from its threat to pull out of the coalition after most of its budget demands were met.

The Knesset passed the 2000 budget two days later.

In the end, Shas received $12 million to keep its debt-ridden educational system running, as well as spending increases in the Shas-run Welfare, Health and Religious Affairs ministries.

"I am happy to say we reached an agreement," Shas leader Eli Yishai said after the crisis was resolved in a final meeting with Finance Minister Avraham Shochat.

Barak had brought Shas, the third-largest parliamentary faction with 17 members, into his coalition with the hope that its politically moderate views would help build a broad-based consensus for peace negotiations.

Shas' departure would have left Barak's coalition with a minority of 51 in the 120-member Parliament. Even with Shas in the opposition, it was unlikely his government would fall, as Barak could rely on support from the Arab and secular parties outside the coalition.

But Shas' withdrawal would have been a blow to Barak's aim at building consensus. It would also have left him more vulnerable to ideological pressures from the National Religious Party, which is opposed to a withdrawal from the Golan.

Opposition leaders sharply criticized the deal reached with Shas.

The secular Shinui Party, which had promised to Barak a "safety net" in passing the state budget in the heat of the crisis with Shas, steamed at the promised funds.

"The government capitulated. It gave in," Knesset member Yosef Lapid of Shinui said.

"We can expect another performance at the next chance when the government needs the Shas votes. We will have another extortion campaign."

On Dec. 30, the Knesset passed its 2000 budget by a vote of 60-40, with six abstentions.

"We've managed to stand by all we said," Shochat said.

That meant meeting the demands of various coalition and opposition factions without having breached the overall $55 billion budget framework, he said, while retaining the planned 2.5 percent budget deficit without increasing taxes.

Before the Knesset vote, Shochat laid out the full details of the cost of winning the support of a majority of Knesset members.

While the opposition claims he spent more than $240 million to obtain the votes of Shas, United Torah Judaism, the National Religious Party, and a variety of other Knesset members, Shochat maintained the figure was $41 million.