A Call to Unity, and to Peres

The President tries to break the political deadlock

It was a "peace" conference as important in its way for the future of Israel as any that had gone before. Seated at opposite sides of a table decorated with bouquets of daisies at Jerusalem's King David Hotel last week were Prime Minister Yitzhak Shamir, the head of the Likud Party, and his political rival, Labor Party Leader Shimon Peres. The two men smiled, shook hands and joked with each other. But the outward congeniality belied the serious political deadlock that had brought them together. Nine days before, they had battled to a virtual draw in parliamentary elections. With neither party in command of enough seats to form a majority in the Knesset, the two leaders were exploring the possibility of joining in a government of national unity.

On Sunday, however, President Chaim Herzog asked Peres to form a new government. The elections had left Labor with 44 seats in the Knesset, three more than Likud but still far short of the 61 needed for a parliamentary majority. In the past, Likud has had more success than Labor in patching together a coalition from the small religious and splinter parties that will now control 35 seats in the Knesset. But as Herzog consulted with many of these 13 groups, it became clear that some former Likud supporters were reluctant to commit themselves to a new Shamir government. Among the notable holdouts was the National Religious Party. Former Defense Minister Ezer Weizman, who leads Yahad, a new party with three seats, is thought to be leaning toward Labor. He told a television audience that "what has happened in the past seven years with respect to the peace process and the economy provides ample reason for criticizing the Likud."

Shamir and Peres had opened their negotiations at Herzog's urging. Said the President: "People from all strata of the public are appealing to me to initiate a national unity government." After both leaders had conferred separately with the President at his official presidential residence in Jerusalem, Shamir and Peres spoke positively about the need to join forces. Peres said he felt that "the entire nation wants a national unity government established, and it is our judgment to respond to the will of the people." Shamir said he recognized the "special need" for such a move. However, many political observers suspected that the two men were merely going through the motions in order to appease the electorate: polls have indicated that a coalition government would have considerable public appeal.

After Peres had been tapped by Herzog, he promised to form "a government as wide as possible, a unified government." Still, he could abandon efforts to negotiate with Shamir and seek to scrape together a parliamentary majority of his own. The two major parties remain deeply divided on a host of issues, from Lebanon to settlement policy in the West Bank. But there are pressing troubles that cannot wait until the tangled election results are finally sorted out. The Bank of Israel announced last week that during July the government had been forced to pump an unprecedented $360 million into the economy and that foreign currency reserves had dropped by $351 million, to $2.6 billion. Inflation is climbing at an annual rate of 400%, and that can only mean more hard times ahead for Israel's foundering economy.