Uneasy neighbors, themselves divided; Israel mudslinging election offers voter's a 'fascist' or a 'saboteur'

The scene on the TV screen is an outdoor rally for Labor Party leader Shimon Peres. The camera closes in on a mob of youthful government supporters who are trying to shout down the opposition leader.

"Begin, Begin" -- scores of dark-haired youths scream ecstatic tribute to the Israeli prime minister. "Begin, Begin, king of Israel," flexing their arms in quasi-military salute.

The camera freezes on a knife brandished in one upraised fist. The slogan, "This madness must be stopped," flashed across the screen.

This is a Labor Party television ad with film of a June 14 campaign incident in the town of Petah Tiqva and it reflects an election campaign that may be the most bitter and divisive in Israel's history.

From 1948 to 1977, when the Labor Party dominated Israeli politics, political battles centered on leftist ideological divisions. But Labor, which is currently predicted to finish behind the ruling rightist Likud coalition for the second time running in June 30 parliamentary elections, is claiming, in Mr. Peres's words, that "the choice at the polls now is . . . . about the state of democracy."

The Labor Party's charges are based on a series of violent campaign incidents aimed primarily at Labor rallies, leaders, and activities. Cars have been spray painted, headquarters vandalized, and an elderly lady who appeared on a Labor TV ad threatened in her home. Mr. Begin has appealed to the public to halt campaign violence. Likud leaders denied backing violence and hint that the Labor party has deliberately provoked it.

But Mr. Peres has placed the blame squarely on Mr. Begin's appeal to the electorate's emotions, which he labeled "Khomeiniism" or "Beginism." He says the violence is organized by the Likud both but this has not been proven. Ugly personal epithets have been exchanged between the two men. Mr. Begin called Mr. Peres "a saboteur" for criticizing the timing of the raid on Iraq, and the Peres accused Begin of the "quasi-fascist" technique of "character assassination."

The violence issue is the first time Labor has gone on the offensive in this campaign, which has seen them squander a 44-14 percent lead over the Likud, according to one well- known poll in January, into a 38-33 percent deficit on June 17 after Israel's raid on Iraq.

The emotionalism of the campaign may reflect a deepening ethnic split in Israeli society, accompanied by a long-range shift to the right. Mr. Begin, despite his Polish origins, is deeply popular with voters from the "oriental" Jewish community -- those who came from Arab countries and their native-born offspring. They have a high birth rate, are often religious, and make a majority of the Israeli population. But they tend to be lower on the economic and educational ladder than Jews of European and American origin (ashkenazis). Labor -- whose traditional strength drawn is from white-collar workers, the middle and upper occupational and educational strata, and secular-minded and older voters -- is perceived as the party of the Ashkenazis.

Mr. Begin's fiercely nationalistic, saberrattling speaking style wins cheers of approval from communities of oriental Jews. Some Labor analysis argue that oriental Jews, originating from non-Western societies that did not embrace liberal democratic values, want a "strong man." This remains conjecture. But many Israelis were startled by a February 1981 poll in Monitin magazine, which showed almost half the Jewish inhabitants raised in Israel favoring revision of Israel's democratic system to a more authoritarian regime.

The campaign so far has centered more on Mr. Begin's personality and rhetoric than on issues of substance, Mr. Begin's series of foreign-policy surprises over the past two months have displaced domestic issues, which were expected to dominate the campaign. Although Syrian missiles remain in Lebanon, the raid on the Iraqi nuclear reactor has isolated Israel internationally and the Israeli-Egyptian summit produced few visible results. Mr. Begin's image of tough leader impervious to world criticism seems to have won him votes.

Mr. Peres, a man without charisma, has been unable to shake an image of unreliability. Nor has the Labor Party, slack from years in power much like the Democratic Party in the US, been able to present a coherent program.

A raging inflation rate -- more than 130 percent, the highest in the world -- was expected to fuel Labor's comeback. Instead, a new Likud finance minister turned the polls around by cutting high taxes on luxury consumer items and massively subsidizing basic commodities and gasoline to keep prices down. Labor economists, as well as the previous Likud finance minister, who quit the party, say inflation will soar again after the election.

Mr. Begin has also won votes in oriental constituencies by charging that Mr. Peres would return the occupied West Bank to the Arabs.

The issue of violence in the campaign holds out the slim chance that undecided votes -- many of them disillusioned Laborities who planned to vote for a small party -- may come back to the fold out of fear of Mr. Begin. Playing to this audience, Mr. Peres has insisted, "The battle is on for the s oul and character of this nation."