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OLMERT & PERETZ & CO.

Acting PM Olmert & Labor Party Leader Peretz Announce Readiness To Cooperate In New Coalition Government

Olmert: 'Labor Will Become Senior Partner In My Cabinet'

Peretz: 'An Olmert-lead Government Will Provide Stability & Survive Its Four Year

In Jerusalem, Acting Prime Minister Ehud Olmert and Labor Party leader Amir Peretz have told the country they are now ready to cooperate in forming a new coalition government. Since Olmert's Kadima party won the March 28th election, both leaders have been broad siding each other by leaks from their officials to the media. However, Olmert and Peretz called a surprised news conference at the PM's office to announce that they have cleared the way for negotiating of a new coalition government. The two biggest parties comprise 48 seats in the 120-member Knesset. President Moshe Katsav is now expected to formally call on Olmert to officially launch officially launch coalition negotiations with potential partners.

Acting Prime Minister Ehud Olmert and Labor party leader Amir Peretz have buried the hatchet and agreed to form a new coalition government.

At the news conference, Olmert revealed they have held secret talks for the past two nights and agreed that Labor will the senior partner in his new government. The acting PM added that all parties who accept the coalition guidelines can also join the government. Olmert stressed the importance of forming a new government as swiftly as possible. After their round of mud- slinging since the March 28th election, both Olmert and Peretz went out of their way to be cordial at the news conference.

Labor party leader Peretz said the secret talks have paid off with a fresh dialogue - they had established a strong basis of credibility with each other. He was confident that a Kadima lead coalition would provide stability for the country and survive its four-year term. Peretz went on to say he would now call on state President Moshe Katzav to reverse Labors prior position and appoint Olmert to form the next government.

The news conference at the PMs office in Jerusalem has ended all the spin by the politicians since Kadima won the election just a week ago. It also ends the media specualtion about a move by the Labor party leader to outflank Olmert. In fact, Peretz first tried to snatch victory from defeat by appealing to the Likud and other right wing and religious parties to form an emergency coalition' cabinet under him. However, it never caught on. Inside Labor, the dubious idea sparked a swift and severe reaction. For example, MK Matan Vilnayie called it a cock-eyed scheme unworthy of Labor after it lost the election. At todays news conference, Peretz played down this gambit calling it an egg that never hatched.Neither Olmert nor Peres took questions from reporters who have been left in the dark since the election. So, there was no light cast on the crucial question of who will get what cabinet post.

Peretz, has his eye set on becoming finance minister, where he could wage his campaign for greater economic and social equality. However, he will now have to accept the defense portfolio, the only other big job on the bargaining table. Olmert is unlikely to move the popular Zippy Livni out of the Foreign Ministry. However, the acting PM is under no obligation to Defense Minister Shaul Mofaz, Johnny-come-lately to Kadima. If Peretz does wind up as defense minister, he will be waging a different battle altogether - against the Hamas administration in the Palestinian areas. The Palestinian Foreign Minister Mahmoud A-Zahar has declared that he has a dream - that one day Israel will be wiped off the map and the state of Palestine will rule from the Mediterranean to the Jordan River. This is his response to the international communitys demand that the new Hamas administration recognize the state of Israel.

David Essing

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