VZCZCXRO5765
OO RUEHROV
DE RUEHTV #2401 3011637
ZNR UUUUU ZZH
O 271637Z OCT 08
FM AMEMBASSY TEL AVIV
TO RUEHC/SECSTATE WASHDC IMMEDIATE 8904
INFO RUEHXK/ARAB ISRAELI COLLECTIVE
RHEHNSC/NSC WASH DC

UNCLAS TEL AVIV 002401 
 
SIPDIS 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: PGOV IS
SUBJECT: KADIMA'S LIVNI BAILS OUT IN FAVOR OF EARLY ELECTIONS 
 
¶1. (SBU) Kadima chairperson Tzipi Livni on Sunday told President 
Peres that she was unable to form a coalition and recommended early 
elections.  Livni, who ended her attempts to form a government only 
two days after the ultraorthodox SHAS and United Torah Judaism (UTJ) 
parties rejected her offers, has instructed the Kadima faction 
chairman to submit draft legislation to dissolve the Knesset and 
hold early elections on January 27.  Kadima's preferred date is only 
one of several possibilities, as other draft dissolution bills are 
pending and Basic Law and other legal provisions suggest an 
alternative election date of February 10. 
 
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SHAS:  THE FIRST DOMINO TO FALL 
------------------------------- 
 
¶2. (U) Livni negotiated with SHAS, UTJ, and the Pensioners Party to 
avoid assuming the premiership with a narrow, left-leaning 
government, but the parties could not overcome several stumbling 
blocks. SHAS demanded nearly $260 million in 2009 for child welfare 
benefits, but Livni refused to offer more than $170 million.  Livni 
also refused to submit to SHAS's demand that Jerusalem be excluded 
from any negotiations with the Palestinians which, together with the 
child allowances stalemate, prompted Rabbi Ovadia Yossef and the 
SHAS Council of Sages on October 24 to opt against joining the 
coalition.  When SHAS pulled out of negotiations UTJ quickly 
followed, as UTJ leaders appeared interested in joining the 
government only if SHAS were also a member.  Pensioners head Rafi 
Eitan, sensing the collapse of negotiations for a Livni-led 
government, on October 25 dismissed the option of joining a narrow 
or minority coalition that would include the left-wing Meretz 
party. 
 
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MISHANDLED NEGOTIATIONS OR PUTTING PRINCIPLES FIRST? 
--------------------------------------------- ------- 
 
¶3. (U) Israeli leaders and pundits are commenting publicly about the 
strategic errors made by Kadima party chairperson Livni, in what may 
rank as the shortest coalition negotiations in Israel's history.  No 
less a figure than President Peres on Sunday pointed out to Livni 
that he was surprised that she had not exhausted the negotiating 
period available to her for the purpose of forming a government. 
Responding to Peres' comment, Livni said that she had reached a 
point where it was clear that there were cases in which more time 
did not help in reaching a solution but only contributed to the 
uncertainty.  The public, she claimed, was weary of what she called 
"intrigues" -- a term she has used in the past when referring to 
extortion tactics in Israel's political culture.  Later, in a 
statement to the media, Livni said "there are prices that can be 
paid and prices that others are willing to pay only to become a 
prime minister in a paralyzed government."  She added that "he who 
is willing to sell everything he believes in just to sit in that 
chair should not be sitting in it." 
 
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NEXT STEPS 
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¶4. (SBU) President Peres, in accordance with the Basic Law, 
immediately began consulting with all the Knesset faction leaders to 
determine if there is another Member of the Knesset (MK) who could 
gain the support of a majority in parliament.  We consider it very 
unlikely that there is such an MK, which means Peres probably will 
inform the Knesset Speaker on October 29 that he will not tap 
another MK to try to form a government.  His declaration means that 
within 21 days MKs can request via majority vote that Peres assign a 
named MK the task of forming a government.  If no request is made, 
as we expect, Peres would then inform the Speaker that he sees no 
possibility of a government being formed.  Following such an 
announcement, the Knesset is deemed to have dissolved itself.  Prime 
Minister Olmert would continue in his post and elections would be 
scheduled for February 10, according to the requirements in the 
Basic Law. 
 
¶5. (U) Kadima, meantime, is looking for elections to take place even 
earlier.  Kadima members are planning to submit this week 
legislation calling on the Knesset to dissolve itself and specifying 
January 27 as the date for elections.  Several other dissolution 
bills have been drafted but have not been formally submitted. 
 
CUNNINGHAM