Israel takes steps to form new government

OCCUPIED JERUSALEM (Reuters) — Israel on Sunday took its first steps towards forming a new government expected to be led by interim Prime Minister Ehud Olmert, who wants to set the country’s final borders with or without Palestinian agreement. President Moshe Katsav, who will choose a party leader to put together a governing coalition, first met members of Olmert’s centrist Kadima Party, which won the most parliamentary seats in the March 28 election.

He then held talks with the centre-left Labour Party, which came second. Discussions with all parties that won seats are likely to last several days.

Both Kadima and Labour said they told Katsav their leaders should form the next government. Kadima took 29 seats in the 120-member parliament.

Political sources quoted a parliamentary committee in charge of the elections as saying that after a recount, Labour, given 20 seats in initial results, had actually won 19. Israeli Arab party the United Arab List won four, up from its original three.

Katsav said he would try to choose a candidate quickly to begin the task. Traditionally the president invites the leader whose party won the most seats.

Kadima, which fared worse in the elections than predicted, said it wanted to build a broad coalition.

Many analysts expect Labour to eventually join it, although a sticking point could be who will get the post of finance minister, a job Labour sees as vital to its social programme.

“A wide government will provide stability to enable the government to make decisions, stand-by them … and fulfill its full-term,” senior Kadima official Roni Bar-On said.

“The ‘convergence plan’ will be an inseparable part of the government’s guidelines,” Bar-On said, referring to Olmert’s proposal to remove settlers from swathes of the occupied West Bank if peacemaking with the Palestinians stays frozen.

Israel would keep major settlement blocs under the plan and trace a border along a barrier it is building in the West Bank, where 240,000 Israelis live among 2.4 million Palestinians.

Palestinians condemn such a move, saying it would annex land and deny the viable state they seek in the West Bank and Gaza Strip, which Israel captured in the 1967 Middle East war.

A new Palestinian government led by the Islamic group Hamas took office last week, vowing to continue fighting Israel. Hamas is sworn to the Jewish state’s destruction.

Hamas Prime Minister Ismail Haniyeh told Reuters any talks with Israel would depend on the Jewish state. Israel refuses to negotiate with Hamas, which it calls a terrorist organisation.

“What is important for us … is that there be brave decisions on the legitimate rights of the Palestinian people and on ending the decades-long occupation and suffering,” he said.

Other parties expected to join Olmert are the Pensioners Party with seven seats, and two ultra-Orthodox Jewish factions, Shas, with 12 and United Torah Judaism with six seats.

Most can be counted on to support a West Bank withdrawal.

But Labour secretary-general, Eitan Cabel, said after meeting Katsav that their party’s leader, former trade union chief Amir Peretz, should be chosen to build a coalition.

“It is clear there is more than one option to form the next government,” Cabel said, noting Kadima had barely won a quarter of the parliamentary seats.

“I call on all factions to come for discussions and recommend [to the president] that Amir Peretz be the next prime minister.” Peretz focused his election campaign on raising minimum wages and increasing spending on welfare, issues important to some smaller parties that won seats.

A candidate chosen by Katsav will have up to 42 days to form a government.