Peres told reporters, ”The Labor Party has decided to vote against the state budget and all the ministers are giving in letters of resignation.” The resignations take 48 hours to go into effect.
The end of Labor’s uneasy 20-month partnership with Sharon could harm U.S. efforts to gain support for a three-phase peace plan that aims for a Palestinian state by 2005.
Out of the 120 seats in the Israeli Parliament, the Likud, Labor and Shas parties held 61 seats. Sharon said he can govern without Labor, with a more conservative coalition. However, the loss of a majority makes the prime minister much more vulnerable to a no-confidence vote.
Some right-wing leaders were already calling for early elections, believing that they would win more seats and solidify their agenda, which would put an end to what they say is Sharon’s compromising approach to the Palestinians. New elections could come as early as the next 90 days.
Labor’s dramatic move came after Sharon and Labor Party leader Binyamin Ben-Eliezer met for three hours trying to avert a showdown. But in the end, they could not reach an agreement over the funding of Jewish settlements in the 2003 budget.
Ben-Eliezer had proposed shifting $145 million from settlements to social programs that are being cut in an attempt to lower the budget deficit, according to the Associated Press. Sharon refused the demand and threatened to dismiss anyone who voted against his plan.
Labor party members voted against the proposed 2003 budget, but it still was approved.
Ben-Eliezer was already under intense pressure from within his party to make a stand against the prime minister. With Labor Party elections just three weeks away, Ben-Eliezer is trailing two other candidates who have said they would pull the party out of the coalition government.
Haim Ramon, one of Ben-Eliezer’s challengers, praised today’s developments.
“I’m happy that we will not be partners in a government that is a failure in all aspects of life,” Ramon said. “We need to leave the government and present an alternative.”
Asked how he felt about resigning, Peres said: “I feel like I’m in a crisis.”
Natan Sharansky, the pro-settler housing minister, accused Ben-Eliezer of manufacturing the fight in order to strengthen his position in the Labor party and prepare to enter the eventual race for prime minister.
No coalition government has completed a full term since 1980 — and Israel has changed prime ministers five times in the past seven years.