Rotation Remains Stalled

The rotation of power remained stalled Wednesday as Shimon Peres and Yitzhak Shamir met again to try to resolve the differences between Labor and Likud that are holding up formation of a new unity coalition government.

Peres, whose resignation as Premier took effect Sunday, heads a caretaker regime. Shamir was scheduled to take office as Premier Tuesday and to present his new government to the Knesset for approval Tuesday night. The two men met Tuesday but failed to reach agreement. Each is under pressure from his respective party and their dispute seems mainly over the status of Likud Liberal Yitzhak Modai.

Modai was forced to resign as Finance Minister last July after a bitter personal confrontation with Peres. He switched portfolios with his Likud-Liberal colleague, Moshe Nissim, who was Minister of Justice. Likud activists demanded his return to the Treasury in the new government headed by Shamir. Labor refused and Likud called for his reinstatement as Justice Minister. Labor wants him out of the Cabinet. Likud is now apparently willing to have him retained as a Minister-Without-Portfolio.

Another matter in dispute is Labor’s nomination of Cabinet Secretary Yossi Beilin to be Israel’s next Ambassador to the U.S. Likud is opposed. Labor insists however, that key diplomatic posts in Washington reflect both partners in the unity coalition, not as hitherto, filled by Shamir appointees.

Political sources said there was still a chance the disagreements will be resolved shortly in which case the Knesset would convene Thursday for a vote of confidence in the new government.

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