Likud-labor Talks Hit Impasse over Cabinet Posts, Settlements

Talks aimed at putting together a Likud-Labor coalition seemed to have reached an impasse Sunday.

Spokespersons for Labor said the positions of the two parties on key issues were too far apart to be bridged.

Likud, meanwhile, is making a last-ditch effort to put together a narrow coalition with the Orthodox and right-wing parties.

Prime Minister Yizhak Shamir has summoned Likud’s potential partners of the religious bloc and secular right to a meeting Sunday night. He will try to dispose of loose ends and reach final agreements with them.

The prime minister hopes to present a government to President Chaim Herzog before Dec. 25, the date his second and last 21-day mandate to form a government expires.

If he reports failure, the president will ask the leader of another party to attempt the task. Presumably, it would be Foreign Minister Shimon Peres, who heads the Labor Party.

It was Herzog’s unprecedented call for a Likud-Labor coalition last month that led to the renewal of negotiations between the two major parties.

But they have made little progress since. They have been unable to resolve differences over the division of Cabinet portfolios and the chairmanships of key Knesset committees.

FINANCE POST FOR PERES

Peres reportedly would agree to become finance minister in the new government, provided that Labor chairs the Knesset Finance Committee.

Labor’s intense interest in that area is motivated, some observers say, by the need to bail out a giant Socialist enterprise, the Hista-drut-owned Koor Industries, which faces bank-ruptcy.

Labor also is said to have balked at the over-generous government subsidies Likud promised the ultra-Orthodox school system and religious institutions.

Other points of dispute include the Education Ministry, presently held by Labor but promised by Shamir to the Orthodox parties, and the number of new settlements to be established in the West Bank.

Shamir has promised the right-wingers 40, at the rate of 10 a year during each of the four years of the next government’s tenure. Labor will agree to no more than six in four years.

Defense Minister Yitzhak Rabin, who has been a strong advocate of a Labor partnership with Likud, said Sunday that such an arrangement is impossible under Likud terms.

Rabin was quoted as telling Labor ministers it would be “madness” to cut the defense budget to provide funds for religious institutions.

Meanwhile, associates of Shamir said if he manges to form a narrow rightist government, he would name Moshe Arens foreign minister and retain the defense portfolio for himself “temporarily,” until Labor agreed to join the government.

If those are his plans, they could cause an upheaval in the top ranks of Likud. David Levy is said to have his eye on the Foreign Ministry. Ariel Sharon has made it clear he intends to be the next defense minister.

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