Likud and Labor Agree on Terms for a National Unity Government
Menu JTA Search

Likud and Labor Agree on Terms for a National Unity Government

Download PDF for this date

The Labor Party and the Likud reached agreement Monday to form another unity coalition government, in which both parties will have equal representation.

The decision, coming seven weeks after indecisive Knesset elections produced a political stalemate, drew expressions of anger and disappointment from Labor’s left wing and from Likud’s die-hard right.

One key element of the agreement is that if either party decides to quit, the only alternative will be new round of elections, not a narrow coalition with other parties.

Another provision gives each of the two partners veto power over admitting a third party to their government.

The agreement is subject to approval by each party’s Central Committee. While it is expected to carry in both, political observers are not ruling out last-minute “surprises.”

The ultra-Orthodox parties and most of those on the far right of the political spectrum are furious.

Politicians from the religious bloc realize that the elaborate promises made them by Likud negotiators in recent weeks have been largely nullified by the agreement with Labor. They accused Likud on Monday of “betrayal.”

Labor and Likud have been dickering for more than a week over a broad coalition. Prime Minister Yitzhak Shamir was reported Sunday to be “fed up” and ready to go with the extremist parties.


The breakthrough reportedly came when Likud acquiesced to a Labor demand that one of its people would chair the influential Knesset Finance Committee.

Shimon Peres, the Labor Party leader, already had to relinquish the office of foreign minister, which he has held for the past two years. He will become finance minister in the new government.

Each party will have 10 ministers, with two in each bloc holding no portfolios. If the practice of the outgoing government is retained, Labor and Likud would each have five ministers in the Inner Cabinet, the government’s top policy-making body.

No formal announcement was made of the senior Cabinet assignments. But it appears the new government will shape up as follows:

Prime minister, Yitzhak Shamir (Likud); vice premier and finance minister, Shimon Peres (Labor); defense minister, Yitzhak Rabin (Labor); foreign minister, Moshe Arens (Likud); housing minister, David Levy (Likud); economic coordination minister, Yitzhak Modai (Likud).

The justice and transportation portfolios are to go to either Ronni Milo or Dan Meridor, both of Likud.

When news of the agreement broke, the smaller parties that had been the object of intensive courtship by Likud reacted with fury and threatened to go into opposition.

“Not honoring the promises Likud made to the religious parties is an act of treason. Likud will have to account for it,” declared veteran Knesset member Menahem Porush of the ultra-Orthodox Agudat Yisrael party.


The National Religious Party said it would join opposition ranks unless it got control of the Education Ministry, promised it by Likud.

Shas, the ultra-Orthodox Sephardic party, made the same threat if it does not get the interior and housing portfolios.

The Labor-Likud agreement provides that promises made to the religious parties would be reviewed by the new government in the context of next year’s national budget. Those promises included heavy subsidies for the ultra-Orthodox schools and other institutions.

The two major parties agreed that eight new settlements would be established in the administered territories during the first year of new government. Additional settlements, would be subject to review after a year.

Likud had promised the right-wing Tehiya party 10 new settlements a year for a total of 40 during the government’s four-year tenure.

Nevertheless, Tehiya indicated Monday that it might join the broad coalition, despite the concession to Labor on settlements.

According to Knesset member Geula Cohen, Tehiya is needed in the government to minimize the influence of Labor “in view of the difficult international situation which Israel faces.” This appeared to be a reference to the U.S. government’s decision to begin talks with the Palestine Liberation Organization.

There were also expressions of disappointment on the left. Knesset member Haim Doron of the socialist party Mapam said the new government was being born “in sin.”

Amnon Rubinstein of the Center-Shinui Movement charged that Peres was “folding the flag of peace” by entering a coalition with Likud.

Founding Funders

The digitization of the JTA Archive would not have been possible without the generous support of the following donors:
  • The Gottesman Fund
  • Righteous Persons Foundation
  • Charles H. Revson Foundation
  • Elisa Spungen Bildner and Robert Bildner, in honor of Norma Spungen
  • George S. Blumenthal
  • Grace and Scott Offen Charitable Fund