Sharon faces crisis as Peres deposed

Ariel Sharon's hopes of continuing to lead a broad coalition Government have taken a major blow with union leader Amir Peretz toppling veteran Labour leader Shimon Peres in one of Israel's biggest political upsets of recent times.

Peretz's unexpected victory over the octogenarian former Prime Minister and deputy to Sharon heralds what could be a shift in the tectonic plates of Israeli politics which Sharon has dominated since the beginning of the century.

Peretz, who in a typically vigorous speech yesterday claimed the mantle of the late Prime Minister Yitzhak Rabin in signalling his desire for early and substantive peace negotiations with the Palestinians, made clear throughout his leadership campaign his intention to pull the party out of the coalition.

The immediate result of a move which he shows every sign of sticking to will be that a general election will now take place by early next year rather than the planned date of next November.

Sharon has relied on Labour under Peres, whose astoundingly long political career dates back to his work as an aide to Israel's founding Prime Minister, David Ben Gurion, to keep his Government afloat in place of the hard right-wing of his own Likud party, which has broken decisively with the Prime Minister over withdrawal of settlements and military forces from Gaza in August.

Most analysts are dismissing Peretz's chances of winning a general election, particularly against Sharon, but the latter's telephone call of congratulations to Peretz yesterday cannot disguise the fact that the Prime Minister, popular in the country but beleaguered in his party, faces a formidable set of unexpected and unwelcome problems. The two men are to meet tomorrow.

There is continuing speculation that Sharon may break altogether with the Likud rebels led by the former finance minister Benjamin Netanyahu, who wants to replace him as the party's leader, and form a new party of the "centre" to contest the elections.

Polls suggest Sharon would have an excellent chance of forming the biggest single party in an electoral contest with a right-wing Likud party led by Netanyahu and a Peretz-led Labour Party.

However, the new political landscape appears to deprive him of the numerically significant coalition partner he would need to form a viable Government after such an election.

Although Peretz's approach to economic policy will face considerable opposition inside as well as outside his own party, his forthright call yesterday for a return to the peace process may signal a more significant shift in the terms of Israeli political debate.

Speaking at a commemoration event near the Jerusalem grave of Yitzhak Rabin, who was assassinated 10 years ago this month, Peretz declared: "We will not rest until we reach a permanent agreement [with the Palestinians] that would secure a safe future for our children and that would provide us with renewed hope to live in a region where people lead a life of co-operation and not, God forbid, where blood is shed."

Peretz, who is the chairman of the trade union federation Histadrut, added: "I came today to make a vow to Rabin, once again, that I intend to do everything I can to continue his way, I intend to do everything I can so that [Rabin's] assassin would know he failed to murder peace."

- INDEPENDENT