Amid peace talks, an Israeli faction balks

Prime Minister Ehud Olmert's fragile coalition government splintered Wednesday when a hawkish political leader announced his party's withdrawal in protest over recently renewed peace talks with the Palestinians.

The resignation of cabinet minister Avigdor Lieberman – who has described trading land for peace as "a fateful error" – resolves a glaring ideological inconsistency within Mr. Olmert's government over the negotiations.

But it will leave the prime minister with a slimmer parliamentary majority of 67 of 120 seats, exposing Olmert to more threats of being toppled, as peace talks advance toward President Bush's deadline of an accord by year's end.

"This is the beginning of the disintegration of Olmert's coalition," says Yossi Alpher, co-editor of Bitterlemons.org, an online Israeli-Palestinian opinion journal. "Olmert doesn't have the coalition necessary to maintain serious peace negotiations, and it is an open question whether he can conceivably organize an alternative coalition to support the peace process."

The resignation comes on a day when the Israeli army evacuated two hilltop outposts in the West Bank and just two days after Palestinian and Israeli negotiators opened talks on "core" disputes: the status of Jerusalem, a border, the fate of the Jewish settlements in the West Bank, and a settlement for Palestinian refugees.

"Prime Minister Olmert made it clear that there is no alternative to conducting serious diplomatic negotiations in order to reach peace," read a statement from Olmert's office.

The resignation comes at a sensitive time for Olmert. In two weeks, the Winograd commission is expected to release its final report on the government's handling of the 2006 Lebanon War. Olmert is expected to come under pressure to resign.

The exit of Yisrael Beiteinu leaves Olmert increasingly dependent on the 12-seat faction of Shas, an ultrareligious, right-leaning party. Shas lawmakers warned that they would pull out too if Olmert cedes sovereignty in East Jerusalem.

Mr. Lieberman, who is controversial for his support for swapping sovereignty over Arab localities in Israel with annexation of settlements, had warned that he would leave the government if he decided it was holding serious negotiations on the core issues.

The defection of his 11-seat party will bolster right-wing opponents of the peace talks such as Benjamin Netanyahu. Opinion polls suggest he would garner a plurality of votes for the right-wing Likud party if an election was held tomorrow.

"[Olmert] is running a center-left policy, while enjoying the support of right-wing parties in the coalition. This is a quite a game," says political scientist Shlomo Aronson.