Israel facing elections after Sharon breaks up coalition

JERUSALEM - Israeli Prime Minister Ariel Sharon has sacked his main coalition partner after a humiliating parliamentary defeat that leaves him scrambling to avoid early elections and save his Gaza withdrawal plan.

In a twin political drama across the Middle East divide, jailed West Bank leader Marwan Barghouthi decided to run in a Palestinian presidential election on Wednesday and Hamas militants vowed to boycott the vote to choose a successor for Yasser Arafat.

Sharon dismissed the Shinui party shortly after it defied him by voting against the 2005 state budget in a first reading in parliament, and aides said he would immediately approach the centre-left Labour Party to prevent his government's collapse.

The parliamentary mutiny marked the sharpest threat to Sharon's grip on power since he was re-elected in January 2003 in a crushing victory driven by popular support for his tough handling of a Palestinian uprising.

The ouster of Shinui, a secularist party that broke with Sharon in anger over spending pledges he made to a religious faction, left Sharon's rightist Likud party in control of only 40 of parliament's 120 seats, making his government untenable.

Sharon must now shore up his coalition to avert snap elections two years ahead of schedule and an indefinite delay to his plan for "disengaging" from conflict with Palestinians by removing all settlements from Gaza and a few from the West Bank.

He is expected to try to wrap up a deal by Monday for a "unity government" with Labour to avoid the risk of being toppled by a threatened no-confidence vote over the economy that day, which could force him to call elections within months.

The government must pass the budget, which has been stalled by strong opposition from left wing and religious parties to cutbacks in social spending, by March 31 or resign.

"There will be no elections," Sharon said confidently after it was clear the budget vote would go against him. The austerity spending package was defeated 69-43.

Sharon spokesman Assaf Shariv said after the vote: "We will approach the Labour party as well as haredim (religious factions)."

Having the dovish, centre-left Labour on board would solidify majorities for the budget and Sharon's "Disengagement Plan". But powerful rightist rebels in Likud, bent on scuttling his Gaza plan, have balked at any such "unity coalition".

Sharon aims to remove all 21 settlements in Gaza and four of 120 in the West Bank in 2005 under a plan backed by Washington.

Sharon lost his majority earlier this year when ultra-nationalist coalition partners were fired or defected after refusing to accept a pullout from the Gaza Strip.

Shinui backs the Gaza plan. But it mutinied over Sharon's promise of 290 million shekels in subsidies to projects of an ultra-Orthodox religious party in exchange for votes needed for preliminary approval of the budget.

Labour is parliament's second largest group with 22 seats and backs giving up land to Palestinians in pursuit of peace.

Likud's hardline Central Committee forced Sharon last August to suspend talks with Labour in hopes of thwarting any retreat from lands occupied in the 1967 Arab-Israeli war.

But Sharon hoped that Likud rebels, facing public distaste at any prospect of a third national vote in less than four years and a consistent pro-pullout majority in opinion polls, would relent on Labour rather than risk elections.

Palestinian politics were also thrown into disarray.

Barghouthi's candidacy as an independent dashed expectations of almost certain victory by the nominee of the dominant Palestinian national faction, Mahmoud Abbas, an elderly former Arafat deputy whose only other challengers were fringe figures.

Barghouthi, charismatic leader of Fatah's younger generation seeking democratic reform blocked by Arafat, told his wife during a visit to his Israeli prison cell to register him as a candidate in the January 9 election. She did so before the midnight (10 p.m. British time) deadline to file required papers.

Palestinian officials originally said last Thursday that Barghouthi, 45, had decided to run. But after he came under pressure from Fatah officials worried about a split in their movement, he had opted on Friday to drop his candidacy.

It was not clear why he had changed his mind once again.

Israeli troops arrested Barghouthi in 2002 and he was sentenced to five life terms last June after being convicted of ordering militant attacks that killed five Israelis. He denied involvement, saying he was a political leader only.

Israel has ruled out any early release of Barghouthi.

- REUTERS