The Sharon government had its first two successes today, even before it was officially formed: The Knesset passed the first reading of the budget law, that which was prepared by outgoing Finance Minister Avraham Shochat, and the cancellation of the Direct-Election law. The budget must still pass two further readings; if it does not pass by March 31, new elections must be held.



Although today\'s special Knesset session began early in the afternoon, the new government will not be presented before the above law and two other important issues are voted on:

* the first reading of the annual national budget - it passed by a 55-32 vote;

* the nullification of the direct-election of the Prime Minister (which was in effect for only three elections) - it passed by a wide margin;

* and an extension of the status quo enabling yeshiva students to defer their army service.



Following the passage of the first reading of the budget law, the Knesset fell headlong into two dramatic and controversial debates. These revolved around the nullification of the Direct Election law, and the extension of the status quo regarding the military deferment of yeshiva students. The 22 hareidi MKs - 17 from Shas and 5 from United Torah Judaism - demand a two-year extension. They say they will vote against the new government if the extension is only for one year, thus causing its downfall even before it is formed. However, it is known that Sharon cannot control the votes of the Labor party, which is largely against any extension, thus that a compromise of a one-year extension - such as that proposed by both Labor and the NRP - will probably be acceptable.