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Israelis argue about welfare cuts

Two women, part of a group of about 2,500 tourists from South Korea, can be seen before a mass prayer in a stadium in Jerusalem on Monday. The tourists, members of a Christian cultural organization, arrived in Jerusalem to attend a convention of the organization and to
Mark Lavie Associated Press
Two women, part of a group of about 2,500 tourists from South Korea, can be seen before a mass prayer in a stadium in Jerusalem on Monday. The tourists, members of a Christian cultural organization, arrived in Jerusalem to attend a convention of the organization and to

JERUSALEM – Ariel Sharon, the hawk, and Shimon Peres, the dove, agree on Israel’s need to pull out of Gaza, but an alliance between their parties was held up Monday by a sharp disagreement over whether Israel should be a welfare state.

Coalition negotiations broke up over the 2005 state budget and welfare cuts. No further talks were scheduled, hinting at a crisis.

Sharon lost his parliamentary majority in June, alienating his right-wing constituency with his plan to pull all Israeli settlers out of Gaza and evacuate four small West Bank settlements.

Sharon on Monday ordered a temporary freeze on the construction of 1,300 housing units in six of the largest West Bank settlements, a government official said on condition of anonymity.

The freeze was ordered to check the legality of the units following the resignation of the hard-line Housing Minister Effie Eitam, who favored their construction, the official said. Eitam quit over the Gaza pullout plan.

But Israel TV reported Sharon acted to placate the Bush administration, which has demanded a halt to new Jewish housing construction in the West Bank.

Sharon, who spent decades expanding Israeli settlements in the West Bank and Gaza, has been forced to turn for support for his withdrawal plans to Labor Party leader Peres, who favors giving up most of the territories in exchange for peace.

Peres is seen by hard-liners in Sharon’s Likud Party as the epitome of defeatism, insisting on negotiations with the Palestinians despite four years of deadly violence. Labor activists view Sharon’s sudden push to uproot some of the settlements he helped build with utmost suspicion.

Peres said Sunday that Sharon has accepted his main demands about the Gaza pullback, including a detailed timetable and the possibility of negotiating with the Palestinians.

The two parties are deeply divided on domestic issues as well. Likud, following the lead of Finance Minister Benjamin Netanyahu, has been pushing a reorganization of Israel’s welfare and public sector-based economy, slashing benefits while providing tax cuts to upper echelons to stimulate the economy.

Labor, which held power for three decades after Israel’s creation in 1948, has discarded its socialist philosophy, but still advocates heavy government spending as a safety net for Israel’s poor.