New Elections Loom As Talks Between Labor and Likud Break Down over ‘weighty Differences’

The prospect of new elections grew today following the apparent breakdown of negotiations between the Labor Party and Likud for a unity government.

Premier Yitzhak Shamir and Premier-designate Shimon Peres emerged from a two-and-a-half hour meeting at the King David Hotel last night with no progress to report. Shamir told reporters that there were “weighty differences” between them which had not been narrowed. Peres repeated the phrase, indicating that they had at least concurred on how to describe the obstacles.

Both men said they would make further efforts to bridge their differences and would “maintain contact over the coming days.” But no date was set for a future meeting.

Before they met last night for what was their fifth negotiating session, Shamir and Peres spoke of “finalizing” an agreement in principle reached last Wednesday. That agreement called for a rotation of national leadership over the next four years — until the next scheduled elections in 1988.

According to the reported agreement, Peres would serve as Prime Minister for the first 25 months of the new regime and Shamir as Deputy Premier and Foreign Minister, reversing their roles in the second half of the government’s tenure. Yitzhak Rabin would serve as Defense Minister for the entire 50 month period and Likud would hold the Finance Ministry portfolio for the duration of the unity government.

The Cabinet would consist of 24 ministers — 12 Labor and 12 Likud. Each of the major parties could assign portfolios to their political allies among the smaller parties.

DIFFICULTIES AROSE DURING CONSULTATIONS

But difficulties arose during consultations between Likud ministers at Shamir’s office yesterday afternoon. “Amended proposals” were offered on key points. Likud insisted that the office of Prime Minister be rotated on an annual rather than biennial basis; that the party holding the Premiership should not hold the Defense portfolio; and that the office of Defense Minister also be rotated.

It is not clear to what degree those amendments were put forward by Shamir as “ultimatums” but Labor sources rejected them out of hand even before last night’s Shamir-Peres talks. According to Labor sources, if it were up to Shamir and Defense Minister Moshe Arens, the tentative deal with Labor would be adopted without difficulty. Some Likud sources tend to agree.

‘REBELLION AGAINST SHAMIR’ FROM WITHIN

But Shamir seems to have run into problems from two of his senior ministers who clearly reject the prospect of any challenge to the Likud leadership being held in abeyance for the duration of a unity government. Laborites pictured the situation as “a test of Shamir’s leadership.”

Political observers spoke of a “rebellion” against Shamir from within his own party. Several of his senior colleagues, taking their cue from Deputy Premier David Levy, reportedly urged him Sunday to toughen Likud’s stance.

SETTLEMENTS POSE MOST SERIOUS OBSTACLE TO UNITY

A further and possibly the most serious obstacle to a unity government is the sharp difference between Labor and Likud over settlement activity on the West Bank.

Peres reported to his colleagues after last night’s meeting that Shamir had insisted that the new government go ahead with 27 settlements approved by the outgoing Likud regime but not yet built. Many of them are sited in the heavily Arab-populated Samaria district where Labor is on record as opposed to Jewish settlement building.

After meeting with Shamir last night, Peres returned to Labor Party headquarters in Tel Aviv and, in the presence of party leaders Yitzhak Navon, Yit-zhak Rabin and Haim Barlev, telephoned Shamir to say his proposals with regard to West Bank settlements were absolutely unacceptable to Labor.

In an interview on the Army Radio this morning, Peres spoke out strongly against Likud’s insistence on a new settlement drive at a time of grave economic crisis. He also dismissed as ridiculous the notion of an annual rotation of the Premiership. “What are we to be, gabboim?” he asked referring to honorary officers of synagogues.

Political observers believe Labor is equally adamant against relinquishing the defense portfolio in any rotation scheme. It is earmarked for former Premier Rabin. Likud sources, who claim there was no agreement in principle last week but merely an exchange of “ideas” indicated that if Rabin would soften his position on holding the Defense Ministry for a full four years, Likud would compromise on other outstanding issues.

Shamir said today, “I have made efforts, and hope I will continue to make efforts towards a unity government. This is the best solution at this time. I regret to say, though, that Labor has not been sufficiently forthcoming.”

LABOR SAYS NO FURTHER CONCESSIONS

Key Labor Party figures said today that there would be no further concessions and spoke of renewed efforts to set up a narrowly based Labor-led coalition. Failing that, the outlook is for early elections, the Laborites said.

The party is intensifying its contacts with the three religious factions — National Religious Party, Aguda Israel and Tami — which hold a combined total of seven seats in the new Knesset.

The NRP is pressing strongly for a unity government. Its leader, Yosef Burg, sided solidly with Labor this morning in its deadlock with Likud over the duration of the rotation period. Burg said on a radio interview that Likud’s proposed annual rotation was not practical and he would make the point at separate meetings he has scheduled with Peres and Shamir today.

Burg’s position could become significant if the NRP decides to “blame”one side or the other for the breakdown of negotiations. Labor hopes it will blame Likud and thereby be more amenable to a Labor-led narrow coalition. The NRP has four Knesset mandates.

Laborites are also encouraged by the fact that an Aguda-Likud pact negotiated last week has not been signed, apparently because of second thoughts by the Aguda in view of the unity talks deadlock. Aguda holds two Knesset seats.

Likud, meanwhile, continues to woo Tami, with one seat. Levy, Yoram Aridor and other Likud leaders had lengthy meetings with Tami’s Aharon Abu-Hatzeira yesterday. According to widespread reports, Likud offered to guarantee Tami three safe seats on its next election list if it promises not to support a Labor-led coalition.

POSITION OF MAPAM

Labor, for its part, faces an almost certain breakdown of its alignment with Mapam if it forms a unity government with Likud. The Mapam leadership has made it unequivocally clear that the party, with six Knesset mandates, would neither join nor support such a government in votes of confidence or other Knesset ballots.

A defecting Mapam may take with it the Citizens Rights Movement (CRM) and leftwing Laborite Yossi Sarid, depriving Labor of an additional four Knesset mandates. But in view of the breakdown in talks, that threat is for the moment academic.

The talk among politicans here today is of early elections, a prospect neither they nor the electorate relish. Israeli voters last went to the polls on July 23.