The vote is scheduled for August 15. The Prime Minister's coalition problems began when he recently fired two right-wing government ministers in order to force through a preliminary cabinet vote on his plan to expel the 7,500 Jewish residents of Gaza and hand over sovereignty of the region to Arafat's Palestinian Authority. Labor MK Binyamin Ben-Eliezer said this morning that if the budget in its current format is placed before the cabinet for deliberations next week, his party would remain in the opposition. Other Labor Knesset members said that Sharon and Finance Minister Netanyahu are making a "mockery" of Labor Party chairman Shimon Peres. Despite the internal party pressure against the talks, Peres resumed coalition negotiations in the early afternoon and said that the new coalition could be formulated as soon as this week, if the deadlock were bypassed. Joining the talks today are the Director of the Prime Minister’s office and representatives from the Finance Ministry.



Sharon, too, faces intensified pressures from his own party. The internal Likud Court ruled today that the party must convene its delegates no later than Friday, August 20th to vote on the inclusion of Labor in a government coalition. The court ruling was issued after Minister Uzi Landau presented signatures of 700 Likud Central Committee members demanding such a discussion and vote. Landau warned against an attempt by Sharon to sign a coalition agreement with the Labor party before the convention. Landau said, "signing a coalition agreement with Labor without the party's authorization is tantamount to a signature on a block of ice."



On yet another front, Sharon faces obstacles in forming his coalition. Yesterday, Knesset Speaker and Likud MK Reuven Rivlin declared that a majority knesset vote would not suffice to authorize the formation a new government. Rivlin said that Sharon would need signatures of no less than 61 Knesset members to receive official Knesset authorization of a new coalition. This decision makes the task of forming a coalition much harder. Sharon has scheduled a meeting this evening with Rivlin.



Peres termed yesterday's meeting with Sharon a “very good” one. Interviewed by the Italian newspaper Il Secolo, Peres said that Labor’s main demands with regard to speeding up the expulsion of Gaza’s Jews from their homes and factories were accepted.



Sharon is hoping to form a government coalition united around the planned pullout from Jewish Gaza, rather than on budget issues. Regarding the budget, Peres said that priorities within the budget could be shifted in accordance with his party’s demands without increasing government expenditure. “If they want to widen the government without us – no problem,” Peres told Channel 2 this morning,” I don't need to flex my muscles all day.” At today's negotiations, Labor representatives presented a new demand: Labor Knesset members be allowed to vote against the 2005 budget while simultaneously sitting in the coalition.



Negotiations also took place yesterday between the Shas and Likud parties. Following the meeting Shas chairman MK Eli Yishai said: “Without the [preservation of the religious] status quo, we will not join the coalition – that is our red line. We have exhausted all discussion and are now waiting for answers. Everybody knows what the options are, the Prime Minister has to make the decision.”



“Most members of the Shas party want to remain in the opposition,” Yishai stressed; “there is a limit to the price we would pay to enter this coalition.”