Yisrael Beiteinu (Israel Is Our Home) party head Avigdor Lieberman announced at a Wednesday morning press conference that his party is quitting the government.

Lieberman informed Prime Minister Ehud Olmert Wednesday that he would resign his position as Minister for Strategic Affairs and lead his party out of the ruling coalition to protest the begin of negotiations with the Palestinian Authority over so-called "core issues": Jerusalem, final status borders and the influx of descendants of Arabs who left their homes during Israel's 1948 War of Independence.

Addressing a press conference at the Knesset, Lieberman praised Olmert for being forthright and open with him whenever they differed on issues, but said Yisrael Beiteinu had set clear red lines for remaining in the coalition.

"On October 27, 2007, a month before the Annapolis Conference, we published our red lines for staying in the government. We were absolutely clear about what it would take to keep our party in the government.

"I met with the prime minister two days before he left for the conference, and 10 days ago I reiterated our red lines yet again: If the government opens negotiations on core issues with the Palestinian Authority, we would leave the government," he said.

Olmert: Accepts Resignation

Prime Minister Olmert accepted Lieberman's resignation and thanked him for his "considerable contributions" to the government and to a variety of security and social measures. However, Olmert stressed he has a "national responsibility" to negotiate with the Palestinian Authority. "There is no alternative to conducting serious diplomatic negotiations in order to reach peace," Olmert said in a statement

Land-for-Peace Equals Failure

Lieberman said the land-for-peace formula that has governed Israeli negotiations for nearly 20 years has been a dramatic failure, and stressed that Jewish communities in Judea and Samaria have nothing to do with the Arab world's ongoing rejection of Israel as a Jewish country. "There was terrorism, there was also a conflict before 1967 [when Israel liberated Judea and Samaria], and before 1948 [the establishment of the State of Israel]. Anyone who chooses to ignore that fact brings destruction to the Jewish state," he said.

He said Israel must discard the land-for-peace formula in favor of population exchange with the Palestinian Authority, and said that 55 percent of Israelis support the idea.

In addition, Lieberman warned that demography is working against a Jewish majority in Israel and challenged left-wing politicians about their vision of peace:

"Pursue Yossi Beilin's idea and retreat to the 1967 border. Then what? Then there will be peace? Then there won't be any more terrorism? Anyone who says [Israel's conflict] with the Arabs is about territory, settlements or outposts is deceiving himself and others." 

"The day after we retreat to the 1967 borders, Israeli Arabs will ask for Palestinian citizenship while continuing to receive National Insurance payments from the State of Israel. It's not a secret – the Israeli Arab Monitoring Committee is open about it. Read the committee's vision statement: 'We demand independence [from Israel] for the Galilee and the Negev. We will never recognize the State of Israel as a Jewish country.' They say it openly; there is no need for interpretation."

Territorial, Population Transfer

Instead of land-for-peace, Lieberman repeated his call for territorial and population transfer between Israel and a future Palestinian state, based on a two-state solution.   But he also said the current negotiations were leading towards something radically different.

"Our guiding principle must be population and territorial transfer," he said. "We want two states for two peoples, not a state-and-a-half for one nation and half-a-country for the other. We cannot accept the asymmetry of a Jew-free Palestinian state and a bi-national Israel with 20 percent-plus minorities."

Lieberman added that failure to "deal" with this asymmetry would lead Arab citizens of Israel to destroy the country.

Olmert's coalition in trouble

Lieberman's announcement reduced Olmert's coalition from 78 to 67 members, and left all eyes on the 12-seat Shas Party. Shas Chairman Eli Yishai told IsraelNationalNews last week that his party would follow Lieberman's lead out of the government if negotiations began on core issues, but a party spokesman told Voice of Israel government radio following the announcement that the party would not be dependent on Yisrael Beiteinu to make it's decisions.

"For us, the only pressure comes from the Jerusalem issue," he said. "If the Israeli government makes clear that it will make concessions in Jerusalem, then Shas will be out. Until that time, there is no reason for us to leave the government. We must keep our eyes open, and keep a finger on the pulse of what's going on, and put the brakes on any concessions in Jerusalem."

The Shas party is a Sephardic hareidi-religious party with a hard-core of voters who oppose any territorial concessions but whose leadership does not rule out the land-for-peace formula. The party maintains popular support for its stated goals of "returning the crown of the Torah to its former glory," and repairing the alleged continued economic and social discrimination against the Sephardic population of Israel.

Anticipating Lieberman's departure, Olmert began negotiations with the United Torah Judaism party last week. In addition, commentators predicted that Olmert may try to add the left-wing Meretz-Yahad Party (five members) to bolster the coalition. Olmert would need both to replace Yisrael Beiteinu, but both groups would be insufficient to secure the government's future if Shas bolts.

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