This record is a partial extract of the original cable. The full text of the original cable is not available.

C O N F I D E N T I A L SECTION 01 OF 02 TEL AVIV 000501 
 
SIPDIS 
 
E.O. 12958: DECL: 01/28/2015 
TAGS: PGOV ECON PREL IS GAZA DISENGAGEMENT GOI INTERNAL ISRAELI PALESTINIAN AFFAIRS
SUBJECT: SHARON BANKING ON SHAS, DISENGAGEMENT SUPPORTERS, 
AND MKS' RAW SELF-INTEREST TO AVERT ELECTIONS 
 
REF: A. TEL AVIV 230 
     ¶B. TEL AVIV 198 
 
Classified By: Ambassador Daniel Kurtzer for reasons 1.4 (b,d). 
 
¶1.  (C) Summary: Prime Minister Sharon's travails to gain a 
Knesset majority for the 2005 budget before the March 31 
deadline continue to center on bringing Shas into the 
coalition.  Two weeks of fruitless negotiations between Likud 
and Shas could come to a head January 30, when Sharon plans 
to meet Shas leader Eli Yishai to discuss Yishai's budget 
demands.  Bringing Shas into the coalition became critical 
for Sharon after 13 Likud MKs threatened January 12 to 
withdraw their support in subsequent budget votes absent a 
disengagement referendum, leaving Sharon about seven votes 
short for passage of the budget. 
 
¶2.  (C) Summary cont'd: If negotiations with Shas fail -- a 
determination that need not be made until well into February 
or even March -- Sharon could pressure some of the 13 Likud 
"rebels" to abandon their threat, counting on those MKs' 
self-interest in averting early elections.  He could also 
co-opt support from pro-disengagement parties like Shinui and 
Yahad, by first gaining their support for a separate 
disengagement budget.  Those parties may then be loathe to 
take the blame for Sharon's -- and disengagement's -- failure 
by opposing the main budget.  End summary. 
 
--------------------------------------------- ---- 
For Now, Sharon Lacks Majority to Pass the Budget 
--------------------------------------------- ---- 
 
¶3.  (SBU) Prime Minister Sharon currently can count on some 
54 MKs out of 120 to support the 2005 budget in the second 
and final readings.  If he fails to acquire a simple Knesset 
majority for the budget before March 31, elections are 
required.  The budget passed its first reading January 12, 
but, at the time, 13 Likud anti-disengagement MKs -- the 
so-called "rebels" -- threatened to vote against the budget 
in subsequent readings if Sharon does not hold a referendum 
on disengagement (ref A).  Without those 13 votes, Sharon can 
only rely on budget support from the remaining 27 Likud MKs, 
19 Labor MKs, five United Torah Judaism MKs, outcast Shinui 
MK Josef Paritzky, and maverick MKs Michael Nudelman and 
David Tal.  The left-wing Yahad party stated in the past that 
it will vote against Sharon's budget, as have the Arab and 
the right-wing parties. 
 
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Shas Noncommittal About Joining the Coalition 
--------------------------------------------- - 
 
¶4.  (SBU) After the 13 Likud rebels made their threat to 
oppose the budget January 12, Sharon resumed stalled 
negotiations with Shas to join the Likud coalition, or, at 
the least, support the budget.  Two weeks of sporadic 
meetings between Shas leaders and Likud and GOI officials 
have stalemated over GOI resistance to Shas' demands for 
restoration of child allowance cuts and Shas' continued 
opposition to Sharon's disengagement plan.  The latest Likud 
overture by Education Minister Limor Livnat to Shas spiritual 
leader Rabbi Ovadia Yosef January 25 ended inconclusively. 
Livnat told The Jerusalem Post January 25 that Finance 
Minister Netanyahu "won't give in on the child allowances, 
but he wants Shas in the coalition and he is willing to pay 
for it."  Livnat offered Shas some USD 150 million in 
stipends for school children.  Sharon reportedly will meet 
with Shas leader Eliyahu Yishai January 30 to discuss Shas' 
budget demands, including child allowances. 
 
¶5.  (C) In an impromptu meeting in the Knesset cafeteria 
January 24, TV news reporter Raviv Drucker -- who had been 
"table-hopping" to speak with various MKs -- told poloff that 
he heard "rumors" that Sharon may offer Shas concessions on 
child allowances while Finance Minister Binyamin Netanyahu is 
away in the United States next week.  Drucker assessed that 
it would not be hard for Sharon to reach a compromise with 
Shas over the budget, but that obtaining Shas' support for 
disengagement would be much more difficult.  Shas' 
constituency, Drucker explained, is leaning against 
disengagement because the settler movement has gotten them 
agitated.  "I've seen (the settlers) in action," Drucker 
emphasized, commenting that they exert "lots of pressure." 
MK Ronny Brizon of Shinui noted that, given Shas opposition 
to disengagement, it is possible that Sharon would "pay 
blackmail money to Shas" in return for Shas' support for the 
budget -- without seeking Shas' entry into the coalition. 
 
¶6.  (C) Shas MK Amnon Cohen and Shas spokesperson Itzik 
Soudri expressed pessimism separately to poloff January 24 
about chances that Shas and Likud would reach a coalition or 
budget agreement.  Aside from the problems with child 
allowances and disengagement, Cohen assessed that Shas would 
lose votes in the next election by joining the coalition, and 
gain votes by staying out. 
 
------------------------ 
Tough Choices for Shinui 
------------------------ 
 
¶7.  (C) Likud Party whip Gideon Sa'ar told the Ambassador 
January 26 that Likud plans to present the disengagement 
budget separately from the main budget before mid-February -- 
a deadline that the Attorney General prescribed in order to 
give sufficient notice to settlers due for evacuation -- and 
that Likud could count on pro-disengagement parties (read: 
Shinui) to support that budget.  The Likud strategy is based 
on the assessment that parties which support the 
disengagement budget would then be hard-pressed to see 
Sharon's government fall by voting against the main budget. 
Shinui MK Eti Livni (protect) stressed to the Ambassador 
January 26 that Shinui will strongly oppose any 
billion-shekel budget deal with Shas, but she agreed that 
Shinui -- as a pro-disengagement party -- would have to 
support Sharon's separate disengagement budget.  She further 
agreed that Shinui would find it difficult to then oppose 
Sharon's main budget, if its opposition would mean the fall 
of Sharon's government and disengagement's consequent 
failure.  Livni conceded that, to avert elections, Shinui may 
be forced to provide Sharon with a safety net.  Livni 
admitted, however, that she could not predict whether Shinui 
leader Tommy Lapid would follow this course of action and 
vote in the interest of the country, i.e. for disengagement, 
or, rather, vote in the narrower interest of his party. 
 
¶8.  (C) In separate discussions with poloff January 24, 
Shinui MKs Chemi Doron and Ronny Brizon also stressed that 
Shinui will vote against the budget -- as it had in the first 
reading -- but, when pressed, Brizon admitted he is unsure if 
his party would consider abstaining to avoid early elections. 
 Shinui MK Ehud Rassabi told poloff January 27 that, "if it 
were up to him," Shinui would not allow the government to 
fall to ensure that disengagement advances.  In response to 
poloff query, Rassabi opined that his views represent the 
majority in Shinui.  Other Knesset sources believe that -- as 
is possible with Shinui -- Yahad might abstain in a close 
budget vote in order to avoid elections and thereby protect 
disengagement. 
 
---------------------- 
Rebels' Armor Cracking 
----------------------- 
 
¶9.  (C) Without a budget or coalition agreement with Shas, 
Sharon will likely apply more pressure on the 13 Likud rebels 
to support the budget.  According to Or Pearl, advisor to 
Likud rebel Ehud Yatom, at least four or five Likud rebels -- 
including Yatom -- have already decided to support the budget 
in the end.  Pearl explained that while the rebels oppose 
disengagement, they do not want the Sharon government to fall 
and early elections to be held since they know that a number 
of Likud MKs will not be re-elected.  Pearl added that Yatom 
had also received "tens" of calls from disgruntled Likud 
members after Yatom, along with the other rebels, opposed 
Sharon in the January 10 vote on his new coalition.  Pearl 
commented, Likud members may oppose disengagement, but they 
do not want Likud MKs to oppose Sharon or the Likud 
coalition.  Likud rebel Gilad Erdan also told poloff January 
11 that the rebels would not cause Sharon to fall out of fear 
of new elections (ref B). 
 
 
 
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