Get Four
Free Issues

Register
Subscribe to BW
Customer Service


Full Table of Contents
Cover Story
Special Report -- Retirement Guide
Up Front
The Great Innovators
Readers Report
Corrections & Clarifications
Books
Technology & You
Economic Viewpoint
Business Outlook



News: Analysis & Commentary
In Biz This Week
Washington Outlook
Asian Business
European Business
International Outlook
Marketing
Science & Technology
Finance
The Barker Portfolio
Inside Wall Street
Figures Of The Week
Editorials


INTERNATIONAL EDITIONS
International -- The BusinessWeek Global 1000
International -- Readers Report
International -- Finance
International -- Editorials
International -- Int'l Figures Of The Week




JULY 26, 2004
INTERNATIONAL OUTLOOK

Israel: Why Peres May Join Up With Sharon

What does Shimon Peres want? On July 12 the Israeli Labor Party leader entered negotiations with Prime Minister Ariel Sharon to set up a national unity government. Peres, 81, thinks he can make one last push for peace with the Palestinians by giving Sharon the support he needs to win Knesset approval for his controversial "disengagement plan."


The plan, which calls for the dismantling of all 21 Jewish settlements in Gaza and four in the northern West Bank by September, 2005, has raised the ire of the Israeli right -- including some members of Sharon's Likud Party. "I will not forgive myself if, because of our hesitations over whether to join the government, the disengagement is not implemented," Peres declared after his meeting with Sharon.

Peres sees disengagement as a turning point in Israeli politics. For the first time, settlers would be leaving Gaza and the West Bank, and Peres hopes their departure could lead to the elimination of dozens more West Bank settlements as well as to negotiations for a Palestinian state adjacent to Israel's pre-1967 border. By rejoining the government, which Labor quit in 2002, Peres is gambling that he will have a say in any unfolding political process. "Peres honestly believes he cannot win an election, and therefore the best way for him to influence events is from within the government," says a political confidant.

Some analysts, however, argue that Peres is suffering from wishful thinking and will be unable to sway the tough Prime Minister. Sharon, 76, views disengagement as a unilateral move necessary to separate the hostile communities and protect Israelis from suicide bombers. That's also why the government is building a 450-mile security fence. But skeptics doubt Sharon will follow up these moves with negotiations for a Palestinian state. "Sharon is trying to avoid [a peace process] at all cost," says Henry Siegman, senior fellow on the Middle East at the Council on Foreign Relations in New York. "From Labor's point of view, it's hard to see how [joining a national unity government] serves their purposes." Siegman predicts that Labor will seriously undermine its credibility in advance of elections in 2006 if it joins a Likud-led coalition.

Hot Political Summer
The shape of the new government will depend on talks that could stretch to October, when the Knesset returns from its summer recess. Peres will bring Labor's 19 Knesset members to the coalition -- enough to give it a legislative majority. He is demanding a detailed timetable from Sharon for the Gaza pullout and key Cabinet positions for Labor. Peres also may push for a softening of Finance Minister Benjamin Netanyahu's austere economic policies. They are credited with restoring Israel's economy to growth -- forecast to be 3.8% for 2004 -- but haven't curbed its 10.8% unemployment. Sharon needs Labor's support to win approval for his 2005 budget.

Even if Peres and Sharon can reach agreement, it could still be a hot political summer in Jerusalem. Likud party rebels opposed to Sharon's disengagement plan are trying to torpedo the proposed national unity government. If Sharon fails to persuade his party to bring Labor into the government, his only alternative will be to hold early elections. That would delay the pullout from Gaza and close the first tiny opening for the peace process in years. This summer, Peres will be doing all he can to stop that. zz



By Neal Sandler in Jerusalem
Edited by Rose Brady
 BW MALL   SPONSORED LINKS
Buy a link now!

Get BusinessWeek directly on your desktop with our RSS feeds.XML

Add BusinessWeek news to your Web site with our headline feed.

Click to buy an e-print or reprint of a BusinessWeek or BusinessWeek Online story or video.

To subscribe online to BusinessWeek magazine, please click here.

Learn more, go to the BusinessWeekOnline home page

Back to Top



TODAY'S MOST POPULAR STORIES

  1. The Real Question: Should Oil Be Cheap?
  2. Microsoft's Online Chief Signs Off
  3. What the U.S. Can Learn from Indian R&D
  4. Why India Will Beat China
  5. Tough Times for eBay Entrepreneurs

Get Free RSS Feed >>
  MARKET INFO
DJIA 11349.28 -283.10
S&P 500 1252.54 -29.65
Nasdaq 2280.11 -45.77

Portfolio Service Update

Stock Lookup

Enter name or ticker



Media Kit | Special Sections | MarketPlace | Knowledge Centers
McGraw-Hill Cos.