The credibility of the Rabin government reached a new low this week when the prime minister and the minister of finance decided to abolish a controversial tax on stock market profits.
The decision, announced by Finance Minister Avraham Shohat, followed a massive pressure campaign by many of the nation’s top industrialists. The campaign was also supported by the hundreds of thousands of ordinary Israelis who invest in the Tel Aviv Stock Exchange.
A poll conducted for the Israeli daily Yediot Achronot showed that despite widespread support for the decision to cancel the capital gains tax, nearly half of those surveyed felt the decision to abolish the tax weakens the government’s credibility.
Most ominously, many Israelis wondered aloud whether the prime minister’s waffling on the tax issue-first he supported it, then reversed himself- reflected a similar inconstancy on the life-and-death issues of the peace process.
After the double suicide bombing at Beit Lid Junction near Netanya on Jan. 22, newspaper polls indicated that 50 percent of Israelis favor suspending talks with the Palestinians because of the ongoing series of terror attacks.
Faced with an increasingly skeptical public, the prime minister declared a new policy goal: the physical separation of the Israeli and Palestinian populations.
In a televised talk to a mourning and angry nation last week, Rabin asserted that erecting a fence between Israel proper and the Palestinian territories was possible and was the ultimate purpose of the peace process.
This week, the Cabinet moved to extend the closure of the territories, an action that had been imposed within hours after the attack.
The move, adopted repeatedly in the past following terror attacks against Israelis, prevents thousands of Palestinians from entering Israel for work.
Palestinian official protested the action, saying the closure amounts to collective punishment. Palestine Liberation Organization Chairman Yasser Arafat has repeatedly stated that Israel’s ban on the entry of Palestinians from Gaza and the West Bank represented a breach of the self-rule accord.
As the Cabinet dwelt on how to fight the ongoing battle against terror, Rabin seemed uncertain how to proceed.
At one point, he seemed almost ready to abandon the peace process, declaring that Israel is “not ready to declare peace at any price or condition”.
He was quoted as saying that “terrorism has become a strategic danger” and the peace process cannot continue without additional security measures taken by both Israel and the Palestinian leadership.
The next day, however, he told Israeli high school students that the peace process must continue.
But he reiterated his position that future progress with the Palestinians would depend on their willingness to live up to security arrangements spelled out in the self-rule accord.
Last week, Rabin’s aides said a high-level committee would be appointed to work out the details of this separation.
Police Minister Mohe Shahal, a Rabin confidant, circulated his plans for a beefed-up police presence along the Israeli border, replete with dogs and radar. The security measure, he asserted, would keep the two peoples safely apart.
Israeli settlements in the West Bank, according to this thinking, would be “concentrated into blocs” around Jerusalem and adjacent to the Green Line, the pre-1967 border. Although not specifically enunciated, it is believed that under such a plan, some of these settlements would have to be abandoned.
All these ideas were bandied about by government officials during the past two weeks in a near-desperate attempt to convince the media and public alike that the peace process is still on track, despite its sinking popularity among both Israelis and Palestinians.
But on Sunday, Rabin sounded to his Cabinet colleagues a good deal less certain and determined-so much so that Communications Minister Shulamit Aloni, leader of the left-wing Meretz bloc, said he seemed to be dropping the peace process altogether.
Instead of high -level committee with a clear mandate, Rabin announced that Shahal and Shohat would examine the idea of separation-one from a security standpoint, the other from an economic perspective – and would report to the Cabinet in a month.
Many observers interpreted this as a vintage device for shelving an idea, especially because Shahal and Shohat are in a state of open warfare that was only exacerbated by this week’s decision to shelve the capital gains tax.
The question of the day was: Is separation about to go the way of the capital gains tax? Are both the victims of a weakening prime minister who is showing himself to be prey to conflicting pressures?
The weeks ahead, in the view of observers here, will be critical for Rabin.
They will determine whether his present decline in authority and popularity will become an uncontrolled tailspin from which the prime minister and his government cannot pull out.
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