Israel's Mitzna spurns Sharon coalition appeal

7.30am

JERUSALEM - Israeli Prime Minister Ariel Sharon failed in talks with Labour Party chief Amram Mitzna on Monday to persuade him to join a broad ruling coalition with Palestinian violence persisting and a war on Iraq looming.

Mitzna said there was no reason for centre-left Labour to recreate a bloc with the right-wing Likud which collapsed in October, because Sharon continued to rule out scrapping Jewish settlements on land where Palestinians are fighting occupation.

"I expected greater moderation, a gesture in our direction, but heard views that do not enable dialogue," Mitzna, who wants Israel to evacuate the Gaza Strip and resume negotiations with Palestinians on a final peace deal, told Israel radio.

He said retaining settlements underscored the Israeli right's insensitivity to worsening poverty from a recession in Israel that he said could be alleviated if funds now devoted to expanding and securing settlements were reallocated.

"(Settlements in) Gaza have no security, social or economic value and (holding on to them) shows unwillingness to appreciate the great economic and social distress in Israel which requires us to change our priorities," Mitzna said.

Sharon, who won re-election last week, champions settlements on lands Israel took in the 1967 Middle East war and refuses to reopen peace talks until the violence, in which at least 1811 Palestinians and 698 Israelis have been killed, is quelled.

But he has also endorsed the Middle East "vision" of US President George W Bush, which calls for reciprocal steps bringing security for Israel and statehood -- albeit geographically undefined -- for the Palestinians.

Sources in the prime minister's office said Sharon had hoped this would be enough to coax Labour into a coalition.

"The prime minister (told Mitzna) a unity government, as broad a government as possible, was vital to the people of Israel," said a statement issued by Sharon's office.

Mitzna repeated that Labour would head the opposition in parliament after the January 28 election and urged the centrist Shinui party not to link up either with Likud, which doubled its seat total in a voter backlash against Palestinian bloodshed.

It was Sharon's first meeting with Mitzna since Labour's worst election drubbing ever. It fell to 19 seats from 26 while Likud soared to 38, the biggest party in the 120-member Knesset.

"Sharon laid out his standard line, so Mitzna had no reason to go for it," a Labour spokeswoman said.

Mitzna is counting on Sharon having to resort to an alliance with small far-right parties hostile to peace moves and unlikely in analysts' eyes to last long, precipitating new elections.

Shimon Peres, Labour's elder statesman who was foreign minister in the previous Sharon government, continued to question the dovish Mitzna's no-coalition stand after other senior, more right-wing Labourites reluctantly fell into line.

"It is impossible to change the economic situation without changing the political situation first," Peres said on Israel's Channel Two television on Monday.

In his victory speech last week, Sharon called for a broad coalition to deal with what he called terrorism and a possible US-led war on Iraq, a conflict that Israel fears could prompt Baghdad to fire missiles at it as during the 1991 Gulf War.

Once he receives an official nod from President Moshe Katzav this week, Sharon will have up to 42 days to form a government.

Shinui, third with 15 seats, has courted Likud but refuses to sit in government with two ultra-Orthodox parties that hold 16 seats between them.

Analysts attributed Labour's plunge to a 28-month-old Palestinian militant campaign for statehood in the West Bank and Gaza that shattered interim peace deals the party pioneered with Palestinian leader Yasser Arafat during the 1990s.

They also say Mitzna alienated many voters by vowing before the election Labour would not rejoin a Sharon-led coalition.

- REUTERS

Herald feature: The Middle East