Labor Alignment Rejects Likud Bid for National Unity Government in Light of U.s.-ussr Mideast Statem

Hints that Likud may seek a national unity coalition government in light of the U.S.-Soviet joint declaration on the Middle East have drawn a sharp negative response from the Labor Alignment. The Democratic Movement for Change (DMC), the second largest opposition party, appeared to be divided on the matter.

Finance Minister Simcha Ehrlich discussed it with Premier Menachem Begin in his hospital room in Tel Aviv yesterday. They reportedly ruled out a formal call for a national coalition because Begin’s invitation for an all-party government offered right after the elections last May still stands. Ehrlich, who is presiding over the government in Begin’s absence, told newsmen yesterday that Israel might have to prepare for an emergency because of its mounting differences with the U.S. He said a national unity Cabinet might be considered.

But Labor Alignment leader Shimon Peres and former Premier Yitzhak Rabin flatly rejected the idea in speeches to Labor groups last night. Peres said that “such a government demands a common platform and conditions such as a state of war or a state of siege. Neither of these conditions exist at the moment.” Labor MK Adi Amorai said a national unity coalition headed by Likud would only strengthen a policy that leads nowhere.

But DMC MK Meir Amit favored the idea despite his party’s decision last month not to enter the Begin government. Others within the DMC are now calling for a reversal of that decision and some have suggested a secret ballot of the party’s leading members.

KNESSET TO DISCUSS FOREIGN POLICY

Both Labor and the DMC agree with Likud that the U.S.-Soviet declaration favoring Palestinian representation at the Geneva conference and Israel’s withdrawal to its 1967 borders represents a serious turn of events with grave portents for U.S.-Israel relations.

Although there is a nearly unanimous consensus in the Knesset against any dealings with the PLO and the establishment of a Palestinian state, the government is expected to come under heavy attack for its foreign policies when the Knesset convenes in special session Thursday. Rabin and former Foreign Minister Yigal Allon have already blamed Likud and Begin specifically for the sharp deterioration of relations with Washington.

SEE ECONOMIC AID FROM U.S.

The joint declaration has raised the question of how long Israel could sustain itself economically if the U.S. chose to withhold assistance as a form of pressure. Ehrlich, who returned Saturday night from a visit to Washington, told newsmen last night, however, that the Americans totally separate Israel’s requests for economic aid from political matters.

Economic circles here said the U.S. might approve Israel’s request for $2.3 billion for the new fiscal year, compared to the $1.8 billion it has received this year. Despite this optimism, the government is expected to discuss an economic emergency contingency plan in the event that Washington “tightens the screws.”

Meanwhile, Cabinet Secretary Arye Naor would say nothing to newsmen last night on the substance of the joint U.S.-USSR Mideast proposals. He indicated, thought, that Foreign Minister Moshe Dayan in New York and Begin at his Friday meeting here with U.S. Ambassador Samuel Lewis had immediately rejected those proposals–and that the Cabinet yesterday had in effect endorsed that rejection. Therefore, Naor said, there had been “no need for the Cabinet to take new decisions.”

Foreign Ministry sources said yesterday that President Carter had asked Dayan to meet him for a second time in New York Wednesday afternoon. Observers here believe this meeting, to be preceded by another session with U.S. Secretary of State Cyrus Vance tomorrow night, will be the final last-ditch attempt by the two sides to break the log-jam over Palestinian representation.

(At the United Nations Vance said today that he was disappointed with parts of Israel’s reaction to the joint U.S.-Soviet declaration on the Middle East because he thought there were some positive elements in the joint communique, especially its definition of peace.)