Israel's Sharon suffers parliamentary defeat

Israeli Prime Minister Ariel Sharon today suffered a stinging parliamentary defeat by rebellious members of his own Likud party that could push Israel towards early elections. Picture / Reuters

JERUSALEM - Prime Minister Ariel Sharon today suffered a stinging parliamentary defeat by rebellious members of his own Likud party that could push Israel towards early elections following its Gaza withdrawal.

In an important test of political strength, hardline Likud lawmakers bent on punishing Sharon for evacuating Gaza settlements voted against three key cabinet appointments, including Deputy Prime Minister Ehud Olmert as finance minister.

The 60-54 vote, which capped a stormy session after a week of negotiations failed to reach a compromise, underscored divisions in Sharon's party that threaten his ability to govern for the remainder of his term due to end in November 2006.

Warning there would be "consequences", Sharon immediately convened a cabinet meeting to consider a revised proposal to be brought to a parliamentary vote.

He was expected to seek separate approval for Olmert's appointment, which was seen as likely to pass parliament, while delaying a vote on the other two more problematic nominees.

Sharon has made clear he prefers to avoid an early general election but aides have said he may have no choice if his own party ties his hands.

There has also been speculation that Sharon could bolt Likud and form a centrist party to capitalise on broad Israeli public support for the pullout. It was completed in September after 38 years of occupation of the coastal territory.

Sharon turned Israeli politics on its head with his Gaza plan, losing some rightist allies and allying with centre-left Labour for the first removal of settlers from land Palestinians want for a state.

The latest political standoff was sparked by Sharon's bid for parliamentary approval for Olmert to replace rival Benjamin Netanyahu, who resigned as finance minister in protest over the Gaza pullout, and for two other loyalists to join his cabinet.

Sharon would be almost certain to win endorsement for Olmert, a close confidant, if he re-submits his name separately before his 90-day term as acting finance minister expires on Wednesday.

Likud dissidents, led by Netanyahu, are mindful that Israel could be hurt in world financial markets if such an important post is left vacant for long.

But the rebels want to prevent the other appointments, Zeev Boim as immigration minister and Roni Bar-On as trade minister, saying the two are being rewarded for backing the Gaza pullout, which opponents see as encouragement for Palestinian violence.

Sharon had insisted on submitting the three nominations together despite lawmakers' vow to torpedo them if presented as a single package.

- REUTERS