JERUSALEM, Sept. 28 (JTA) – A long and bitter battle over alleged financial irregularities in the Shas Party”s school system has come to an end. While all the parties to the dispute – including Prime Minister Ehud Barak, Education Minister Yossi Sarid and Shas leader Eli Yishai – claimed victory when they reached an agreement, the dispute could poison relations within the coalition in the months ahead. For Barak this is a particularly ominous thought, since he hopes to make major steps forward in the peace process and will need the support of all his coalition allies if and when he brings new peace accords before the nation in a referendum, as he has pledged to do. The school crisis ended Tuesday, when Sarid – the leader of the secular Meretz Party and a staunch political foe of the fervently Orthodox Shas Party – agreed to provide funds to pay the long-overdue salaries for the Shas system”s teachers and staff. To bring this about, the entire Shas leadership had been required to sign their names to a “recovery plan” for their financially troubled school system, Hama”ayan Hatorani. The plan had been hammered out in long days and nights of negotiations between Yishai and Sarid, with Barak and his aides in close attendance. The new program is designed to halt what the Education Ministry charges has been the wholesale mismanagement and cavalier disbursement of state funding within Shas” rapidly growing network of schools. One of the key conditions that Shas was forced to accept was the suspension of the school network”s director, Rabbi Ya”acov Hemed, pending his trial on charges of misappropriation. “We will not stand corruption,” a furious Barak told Yishai last week. “And no one – I mean no one – threatens me!” Barak”s ire was aroused by a warning from Yishai that Shas had “other options” and that the Barak government would not survive if the crisis was not resolved. To illustrate his point about “other options,” Yishai held a photo-op Sunday afternoon with the leader of the opposition Likud Party, Ariel Sharon. The two men announced that Shas would be joining a “policy forum” that Sharon was setting up in which issues of foreign and defense policy would be discussed on an ongoing basis. That same night, the Sarid-Yishai negotiations were finally brought to a successful conclusion. This timing enabled Yishai and his supporters to claim, with much cogency, that their tough tactics had paid off. Sarid, for his part, called a news conference to publish the text of the document that Shas leaders were being required to sign and to argue that it signaled the beginning of a new era of honest and efficient administration in the Shas school system. For Barak, the agreement meant Sharon”s “forum” would remain – for the moment at any rate – pretty much a dead issue. Shas, for all its claims of victory, had opted to stay firmly put, with its crucial 17 Knesset members, inside Barak”s coalition. “Sarid has shown he is not the education minister of all the children of Israel,” Yishai asserted Monday. And a member of Shas” Council of Sages, Rabbi Shalom Ba”adani, said, “Life in the government is like in Sodom.” Nevertheless, Shas seems to have concluded, under the insistent direction of the party”s spiritual leader, Rabbi Ovadia Yosef, that, Sodom or not, life inside the coalition is to be much preferred to life in the cold desert of opposition. But the episode has left its scarring on the awkwardly woven fabric of the Barak coalition, with its seven disparate parties. If Shas and Meretz had little love lost for each other prior to this latest episode, there is even less now, following a month of public wrangling and recriminations. If and when the referendums Barak promised on the peace process are held, they will ostensibly refer solely to the question or questions – regarding withdrawals from the West Bank or Golan Heights – on the ballot. In practice, though, they may become a midterm test of Barak”s popularity – in which case he cannot convincingly win without at least some of the growing Orthodox constituency. These thoughts must cast a gray cloud over Barak”s assessments of what the future may hold, despite his braggadocio about not being threatened by anyone. For Sarid and his Meretz Party, the satisfaction of “teaching Shas a lesson” in civics must similarly be marred by the nagging awareness that Sharon is waiting there in the wings, eager to join the government and make up for any depletion caused by a defection of one or more of the present coalition partners. Elected the leader of Likud in September by a sweeping majority in party primaries, Sharon has no effective opposition within his party. If he wants to serve under Barak – and the word in the political community is that he would not mind at all – then he can corral his colleagues into the coalition with ease. Shas” less than happy encounter with Sarid dovetails into the ongoing trauma the party is undergoing in the wake of the March conviction for bribery of the party”s former leader, Aryeh Deri. Deri”s conviction and subsequent four-year sentence led in the short term to Shas” huge backlash success in the May elections. The party grew from 10 seats to 17 in the 120-member Knesset. The battle cry, “He is innocent,”” accounted for at least six or seven of those seats. But in the longer term, Deri”s conviction, and Barak”s insistence that he remove himself from active politics pending his appeal, has resulted in a wrenching upheaval within Shas. Yosef, asserting his religious and moral authority against Deri”s entrenched following among party activists, has installed a younger disciple, Yishai, as interim party leader. Yosef has, in effect, reconciled himself to Deri”s forced departure and is now forcing the party to reconcile itself, too. More specifically, Yosef flatly overruled Deri”s objections to Shas joining the Barak government, and in the just-ended crisis Yosef once again moved firmly and forcefully to neutralize Deri”s efforts to bring about Shas” secession. At a Sukkot rally in Jerusalem on Monday that brought together tens of thousands of Shas rank-and-file members, speaker after speaker praised Yosef, paid fealty to Yishai as the rabbi”s choice of leader – and pointedly failed to mention Deri. True, some diehard supporters of Deri expressed their ongoing devotion, but Yosef and Yishai carried the day. Here, too, the short-term effect is favorable: The battered party needs the smack of firm leadership, and Yosef has risen to the occasion. But down the road the outlook could be murky if Yishai fails to successfully fill the large shoes of his able predecessor. A whole cadre of job-holders owe their livelihoods and status to Deri, and they are hardly looking to be shunted out of power. The infighting triggered by Deri”s removal may have dealt a severe setback to Shas” goal of overtaking Likud, which has 19 Knesset seats, in the next election and becoming the second-largest party in the country. And that setback was likely exacerbated by the just-ended crisis over funding for the party”s school system.