JERUSALEM, April 20 (JTA) — Although Israel”s attorney general has announced his conclusions in the Bar-On affair, the ramifications of the investigation into influence-peddling in the senior echelons of the Netanyahu government are not yet over. While Prime Minister Benjamin Netanyahu eluded indictment in the affair, he was this week continuing to defend his political stature even as he sought to ensure that none of his coalition partners jumped ship. Attorney General Elyakim Rubinstein announced Sunday night that he had not found sufficient evidence in a 995-page police report to indict Netanyahu in connection to corruption allegations surrounding the short-lived appointment of Roni Bar-On as attorney general. Citing a similar lack of evidence, Rubinstein said the file on Justice Minister Tzachi Hanegbi also would be closed. However, the attorney general did find grounds to indict Shas Knesset member Aryeh Deri for alleged breach of trust, fraud and extortion. Speaking at a news conference where he and State Attorney Edna Arbel announced their decision, Rubinstein said that a “dismal picture”” of the norms of government had emerged from the police investigation, but that insufficient evidence of criminal behavior was found. The police had recommended bringing charges against Netanyahu, Hanegbi and Avigdor Lieberman, director-general of the premier”s office, but the final decision was in the hands of Arbel and Rubinstein. They have not yet made a decision about Lieberman. “We based our decision on purely professional elements — is there enough evidence to file criminal charges,”” Rubinstein said. Netanyahu welcomed the attorney general”s decision, saying he felt vindicated. “I made a mistake, I admit that, but I did not commit a crime. There is a big difference between the two,”” he said in a televised statement. The attorney general”s announcement followed intensive consultations on the findings of a three-month long police probe into allegations surrounding the aborted appointment in January of Bar-On, a Jerusalem lawyer and Likud activist. Bar-On, whose appointment was endorsed at a January 10 Cabinet meeting, stepped down two days later amid a controversy over his professional qualifications. The allegations, first raised in an Israel Television report, suggested that Netanyahu”s coalition ally Deri, had pushed for Bar-On”s appointment in the hope of getting a plea bargain in his own ongoing corruption trial. In the aftermath of Sunday”s decision by the attorney general, questions lingered about the viability of the fragile 9-month old coalition led by Netanyahu. The immediate danger facing Netanyahu is possible erosion of support within his Cabinet over the Bar-On affair. Netanyahu, in a CNN interview Sunday night, admitted that he “could not guarantee”” that every one of his ministers would stick with him. However, he declared that the parties comprising the coalition were “solid”” and the government would endure. Two key coalition parties, Yisrael Ba”Aliyah and the Third Way, were meeting before Passover began Monday evening to decide how to respond to the attorney general”s report. Yisrael Ba”Aliyah leader Natan Sharansky was burdened by his own statement, when the allegations surrounding the appointment of Bar-On were first aired on Israel television three months ago, that “if only 10 percent of them are true — this government must go.”” Yehuda Harel, leader of the Third Way, said Sunday night that the attorney general”s report was “very far from an exoneration of the prime minister.”” If either of these parties decides to bolt from the coalition, the prime minister would be forced to call new elections — both for prime minister and for the Knesset. Netanyahu could face discomfort from yet another coalition partner — the fervently Orthodox Shas Party, which holds 10 Knesset seats. The fact that only party leader Deri is to be indicted in connection with the Bar-On affair was causing enormous resentment in Shas, and party spokesmen called Sunday night for mass demonstrations. If, however, these three parties remain in the government, Netanyahu can be confident of weathering the possible defections of one or more of his own Likud Party colleagues. At least two Likud Cabinet members, Finance Minister Dan Meridor and Communications Minister Limor Livnat, were assessing their own personal futures early this week. Both have expressed reservations about Netanyahu”s style of governance. In any event, Netanyahu could make a quick Cabinet reshuffle, including removing Hanegbi, who was closely associated with Bar-On, and perhaps bring in some new faces. Netanyahu promised to appoint a Cabinet committee that would carefully weigh appointments such as attorney general in the future. An alternative scenario for the government”s future envisions Yisrael Ba”Aliyah and the Third Way joining forces with the Labor Party in a special Knesset vote to remove the prime minister, which requires a majority of 80 out of the 120 parliament members. In that event, the Knesset would not dissolve and a new election would be held only for prime minister. What steps might be taken in the Knesset were likely to await High Court of Justice action on petitions by Labor Knesset member Yossi Beilin and Meretz leader Yossi Sarid, who were appealing to the court to overturn the attorney general”s decision not to implement the police recommendation to indict the prime minister. However, most legal experts in Jerusalem agreed with the premier that the chances of the High Court reversing the attorney general”s decision are slender at best. As the domestic political maneuvering continues, Netanyahu can be expected to step up diplomatic moves on the stalled peace process and to seek to enhance the image of business as usual. “We”ve got a lot a work ahead of us,”” he kept telling a CNN interviewer and his tens of millions of viewers, determined to create an image of a back-to-normal administration brushing off a passing cloud. “It”s all just politics,”” he assured the viewers. But the prospect of continuing domestic political instability in the weeks ahead does not augur well for efforts to get the Israeli- Palestinian peace process back on track. With his coalition now shakier than ever, he will be more dependent on its hard-line elements, the National Religious Party and the right wing of Likud. These elements almost rebelled over the Hebron accord in January, and over the scale of Netanyahu”s proposal to transfer 9 percent of rural West Bank land to the Palestinian Authority in the first of three further redeployments. These Cabinet members had objected to the transfer of the two percent of West Bank territory that was still under sole Israeli control. The redeployment was not implemented after the Palestinian Authority objected to what it described as the redeployment”s limited scope. The hard-liners, totalling 17 Knesset members, have given notice that they will bolt if a second redeployment, slated for September, proves more generous. To that extent, therefore, Netanyahu seems more hamstrung than ever – – and the prospects of a resumption of forward movement in the peace process with the Palestinians are dim. However, the logic of the prime minister”s complicated situation could lead to a radically different outcome. Beleaguered at home and disparaged abroad in the wake of the attorney general”s report, Netanyahu might go for a dramatic move forward on the peace front as a way to recover his diminished international standing. After all, at the end of the day the hard-liners in his coalition have nowhere else to go, while the Labor opposition can be counted on to back the premier in the Knesset if he takes a generous position vis-a-vis the Palestinians. That may not be the most likely scenario. But then these are not ordinary times for Israel.