Page last updated at 11:11 GMT, Friday, 24 October 2008 12:11 UK

Key Israel party spurns coalition

Tzipi Livni
Ms Livni may still be able to form a narrow coalition

The religious Shas party says it will not join the coalition Tzipi Livni is trying to form, in a major setback for the would-be Israeli Prime Minister.

Ms Livni, head of Kadima, the largest party, said on Thursday Israel would face elections if she had not formed a government by Sunday.

She has the support of the Labour party but is still short of a majority.

Correspondents say the move is a blow to Ms Livni, but she may still be able to form a minority government.

The ultra-orthodox Shas party said it had decided not to continue negotiations with Kadima, after the parties were unable agree on the status of Jerusalem and welfare benefits.

A party spokesman told Reuters news agency that Shas had asked for only two things, "real financial help for the weak in Israeli society and protection for Jerusalem... which is not merchandise for sale".

Kingmaker party

Ms Livni, currently Israel's foreign minister, is committed to continuing peace negotiations with Palestinians, but Shas is opposed to discussions on the status of Jerusalem.

The Palestinians have demanded that east Jerusalem - occupied by Israel since 1967 - should be the capital of a future Palestinian state, while Israelis consider the city their own "eternal, undivided" capital.

Ms Livni's deal with Labour gives her a total of 48 seats in the 120-member Knesset.

With 12 seats, Shas is currently the third-largest party and has often played the role of kingmaker in Israeli politics.

Ms Livni could still form a minority government with left-wing Meretz and the Pensioners Party - although talks with the latter are reported to be stalled.

She has another 10 days to continue coalition building. But she has said she will announce on Sunday whether she has been successful, in what is widely seen as an ultimatum to potential partners.

If she is unable to form a government, President Shimon Peres may ask another MP to try to do so, or call elections.

Ms Livni was voted head of Kadima after former Prime Minister Ehud Olmert said he would step down in the face of multiple corruption investigations.

Polls suggest the opposition Likud party, led by Binyamin Netanyahu would gain most seats in a general election.

Print Sponsor

Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit


Americas Africa Europe Middle East South Asia Asia Pacific