Labor gone, so Sharon may move further right

JERUSALEM — Prime Minister Ariel Sharon will have to be as good a political strategist as he was a general if he is to survive the collapse of his national unity government this week.

Labor's defection leaves Sharon with four stark choices. He can:

*Tender his resignation and call for new elections in 90 days.

*Limp along with a minority government.

*Set up a narrow but stable right-wing government.

*Agree with Labor on a date for new elections sometime next spring.

At the moment, political pundits expect that without Labor Sharon has no choice but to move further to the right. That may be the only way he can survive a challenge from his nemesis, the rightist former prime minister, Benjamin Netanyahu.

At the same time, Sharon must be careful not to go too far to the right and anger the Bush administration as it prepares for an invasion of Iraq.

Most political observers expect that Sharon will choose his fourth option — agreeing with Labor on new elections in April or May. That will give him time to solidify his base on the right, and hopefully give the United States the time it needs to move on Iraq.

The government crisis came about Wednesday during the preliminary vote on the 2003 budget. After negotiations on a compromise ended in a shouting match, Defense Minister Benjamin Ben-Eliezer submitted his resignation to Sharon. Foreign Minister Shimon Peres and four other Labor ministers followed suit.

The resignations were to take effect after 48 hours, and because of Shabbat, the country is likely to be in political limbo at least until early next week.

Barring new developments in that narrow window, Labor will join the opposition after a 19-month experiment in national unity in the face of the violent Palestinian uprising.

The ostensible sticking point was some $150 million in budget allocations for Israeli settlements in the West Bank and Gaza Strip that Ben-Eliezer said should go instead to social programs. But pundits — and, polls showed, many Israeli voters — considered that a transparent excuse: Ben-Eliezer faces Labor leadership elections in three weeks, and he trails badly behind his two dovish challengers.

Labor's defection means Sharon now commands the support of only 55 of the 120 Knesset members. To survive, he would need to split the opposition on key issues or get the seven-member, far-right National Union-Israel, Our Home faction to join the coalition or at least support it from the outside.

That makes Avigdor Lieberman, National Union-Israel, Our Home's leader, a key player. The trouble is that Lieberman dislikes Sharon with a passion, and he is a close political ally of Netanyahu.

On the face of it, the chances seem remote that Lieberman will help the 74-year-old Sharon survive and position himself better for a leadership challenge from Netanyahu.

But it's not that simple. Will Lieberman want to topple the Sharon government by joining the left-wing Meretz and the Arab parties in voting no-confidence? Will he want to lead a right-wing move to bring down a Likud-led government, taking the chance that the left may then come to power, as happened in 1992 and 1999?

And will he want to be blamed for deliberately preventing the formation of an ideologically homogenous right-wing government?

Sharon is ambivalent about the possibility of a narrow right-wing government. On the one hand, by instituting right-wing policies that are pro-settler and tougher on the Palestinians, he could erode some of Netanyahu's support on the right.

But he knows those policies would bring him into the kind of head-on confrontation with Washington that he has tried at all costs to avoid.

What Sharon does next will be determined largely by Netanyahu's leadership challenge. Sharon must adopt a formula that will enable him to score political points within Likud against Netanyahu, yet he cannot antagonize the United States.

In that context, Sharon is considering appointing the former army chief of staff, Shaul Mofaz, as defense minister in place of Ben-Eliezer, and Jerusalem Mayor Ehud Olmert as foreign minister instead of Shimon Peres. Such new, high-profile political alliances might strengthen Sharon's standing with the Likud rank-and-file.

Sharon also hopes the appointments would help him stay in office for at least a few months more.

Meanwhile, Ben-Eliezer's decision to quit the national unity government was also greatly influenced by internal party leadership challenges. Not long ago, he was telling a Labor Party convention how important it was to support the budget as is.

Pundits say Ben-Eliezer's change of heart stems from polls that show him trailing his challengers for the party leadership, Haifa Mayor Amram Mitzna and Knesset member Haim Ramon.

Both Mitzna and Ramon have clamored for Labor to leave the Sharon government, and their message is popular among Labor members who will choose the party's leader Nov. 19.

With time running out, Ben-Eliezer was advised to make a dramatic move that could bring him back into contention.

But pundits aren't convinced that Wednesday's dramatic step will really do Ben-Eliezer much good.

According to polls, most Israelis believe Ben-Eliezer engineered the budget crisis for partisan reasons, since the settlement spending in question — some $150 million — is a minuscule portion of the $60 billion budget, about one-quarter of 1 percent.

Still, the move to the opposition could help Labor. Party strategists have been saying for months that to have any chance in national elections, Labor must differentiate itself sharply from the Likud.

As a partner in a Likud-led government, where Labor shares responsibility for government policy, it could hardly differentiate itself. In the opposition, however, it can.

Moreover, the issues Ben-Eliezer chose for leaving the government — settlements and a fairer economic deal for weaker groups like pensioners and students — show how Labor intends to fight the coming election.

The main focus will be on socioeconomic issues, which Labor will argue can only be improved by channeling money away from settlements, as well as changing the basic economic conditions by making peace with the Palestinians.

Only Labor can take those steps, the party will argue, because it is ready to dismantle settlements as part of a peace deal.

In the meantime, it is Sharon who faces the immediate problems.

Though the budget passed its first reading on Wednesday, it's not clear whether he will be able to maintain the budget ceiling and the deficit target without Labor's help.

Labor's departure gives the remaining members of the government coalition far more leverage: Between now and the budget's second and third readings, each of the small parties could try to force Sharon to make special allocations to the sectors they represent, with disastrous consequences for Israel's credit rating.

Sharon's options will be refined very soon: The picture will become clearer next week when the Knesset considers no-confidence motions tabled by the Meretz and Shinui parties.