Tuesday, May 18, 1999 Published at 21:50 GMT 22:50 UK
World: Middle East
Shas leader quits to allow coalition
Aryeh Deri: Four year prison sentence deferred
By Hilary Andersson in Jerusalem
The leader of Israel's ultra-orthodox Shas Party has resigned from his seat in the Knesset to allow it to negotiate a coalition with the victorious Labour Party.
Meanwhile, hardliner Ariel Sharon has temporarily taken over the leadership of the Likud Party following Binjamin Netanyahu's resignation yesterday.
Shas performed surpringly well in the elections, increasing its seats from 10 to 17 - just two fewer than the second largest party, Likud.
Mr Deri's four year sentence for corruption, bribery and fraud has been deferred, awaiting a Supreme Court appeal.
This means that Likud - another possible coalition partner - is led by a right-wing hardliner.
Mr Barak is currently faced with the decision of what kind of government to form. He may have to work together with one of the religious parties.
Shas, because of its size, is one obvious choice. Shas is right-wing and orthodox, but has a middle of the road view on the peace process.
Likud could insist on agreeing policy guidelines before it joins such a government, and a united policy might be difficult to agree.
Mr Barak has set himself a difficult road by promising to kick-start the peace process, withdraw troops from Lebanon and take measures to reunite a fractured society.
He needs to avoid the dilemma of his predecessor, Binyamin Netanyahu, who was crippled by his fragile and diverse coalition.