June 21, 2004

JERUSALEM (AFP) - Israeli opposition leader Shimon Peres dampened prospects of an early entry into a new-look coalition with a blistering attack on Finance Minister Benjamin Netanyahu as his party set its sights on his economy portfolio.

Peres said that Netanyahu may have created 6,000 millionaires through his ultra-liberal economic policies but had left the rest of Israel's six million population worse off.

"Their salaries, their pensions have been cut and I do not see a good Jewish community ignoring the fate of the poor, the wounded," he told an assembly of the Jewish Agency. "We are a nation of solidarity, not in competition."

His latest comments came a day after he described Netanyahu's policies as "swinish capitalism". Netanyahu, in the United States, has already warned that Labour's entry into government would scupper his programme of reforms, particularly a controversial privatisation package.

Peres said he saw no point in joining a reshaped government if there could no be agreement on policy.

"I am for a unity government, if we can have a united policy. I cannot see any reason to have a unity government with a divided policy."

The Nobel prize-winning former premier said Prime Minister Ariel Sharon's Likud party was deeply divided over the planned withdrawal from the Gaza Strip (news - web sites), which is only likely to get through parliament with Labour's support.

Sharon's so-called disengagement plan was rejected last month in a referendum among members of Likud, many of whom who have long advocated control of the whole of biblical Israel, including the Palestinian territories.

"Today we have a government without a policy and a policy without a government," said Peres.

"We are ready (for government) but with whom? Likud must make up its mind whether to go back to the Greater Israel (policy) or go ahead with a great peace."

Peres backs the prospect of a withdrawal from Gaza but wants to see the government coordinate with the Palestinians, again describing their prime minister Ahmed Qorei on Monday as a man "who wants peace and is ready for compromise."

A leading Labour deputy, Shalom Simhon, said that Labour would demand control of the finance ministry as part of any deal to enter a new coalition.

"The central portfolio that we will demand is that of the treasury," he told public radio.

But Peres played down his comments.

"I do not want any ministry. I want a policy," he told AFP on the sidelines of the meeting. "Ministries are no compensation for policies."

While Sharon regards Netanyahu as his chief rival within his Likud party and for the premiership, he also knows that the former prime minister is too powerful to be ousted.

The Jerusalem Post, a traditional Netanyahu cheerleader, said in an editorial Monday that Labour should not be allowed the "wreck" his achievements.

Labour recently swelled the size of its parliamentary faction by merging with the leftist One People party, which had been led by union chief Amir Peretz.

"Given the chance, Labour would lose no time restoring the transfer payments Netanyahu cut last year and the trend towards reducing the tax burden would be stopped in its tracks," said the Post.

The party is currently providing a safety net in parliament for Sharon's government, abstaining in no confidence motions brought by other opposition parties.

Leading Labour powerbroker and former defense minister Benjamin Ben-Eliezer was quoted by public radio as telling a meeting of party deputies that the safety net should only be extended to Sharon's diplomatic programme and not his government's economic policies.

© 2004 Yahoo! Inc. All rights reserved.