Jerusalem - The powerful ultra-Orthodox party Shas said on Tuesday it planned to quit Prime Minister Ehud Barak's coalition, a move that would leave him with a minority government to negotiate peace with Israel's Arab neighbours.
The party's spiritual leadership, the Council of Torah Sages, said after a two-hour meeting that it had instructed the four Shas ministers to tender their resignations to the cabinet on Sunday.
"Shas is not a full partner in the coalition, it is not a partner to the political process," the council's secretary-general Raphael Pinhasi said after the meeting.
The support of Shas, the third largest party in parliament with 17 seats is crucial for the survival of Barak's broad-based 11-month-old government.
It is not the first time Shas has made such a threat because of a long-running feud over funding for its financially crippled religious schools network and then backed down and political commentators suggested it could again be a ploy to extract greater promises from Barak.
But the party's political leader Eli Yishai, who held a fruitless meeting with Barak on Monday night, insisted the decision was final.
"There will be no further negotiations," Yishai, who is also labour and social affairs minister, told reporters.
The crisis was triggered after Shas and another two right-wing and religious coalition parties sided with the opposition in a preliminary parliamentary vote for early elections.
There was no immediate reaction from the office of Barak - whose government currently has 68 seats in the 120-member parliament - but Justice Minister Yossi Beilin said there would be no new elections.
"There will not be any early elections, we have no time to waste, we have a political process to see to," he told Israeli public television, which broadcast a special news programme on the crisis following the announcement.
The right-wing opposition party Likud, which lost the last general election in May 1999, said it hoped the Shas announcement would lead to early elections that would restore it to power.
"I see no other option except to change this failing government," Likud chairman Ariel Sharon told the television.
Avigdor Lieberman, leader of the right-wing Russian immigrant party Israel Our Home which introduced the elections bill last week was already planning for a new poll.
"We will decide on the date of new elections in the coming few days, any date by November is good," Lieberman told public radio.
The crisis deteriorated into vicious mud-slinging on Monday when Health Minister Shlomo Benizri of Shas accused left-wing Education Minister Yossi Sarid - who has long refused Shas's funding demands - of inciting hatred in the same way as the Nazis during the Holocaust.
"I am not at all happy about the decision, we tried to meet their demands," Sarid said.
After the elections bill defeat, Barak embarked on intensive negotiations hoping to cobble together a government with a similar make-up to the current one, including Shas, rather than forming a narrow coalition which may need to rely on the support of Arab parties for his peace policies.
Shas, which was also a member of former right-wing prime minister Benjamin Netanyahu's govenrment, has long been a thorn in Barak's side and in recent months has openly flirted with the Likud.
An opinion poll published in the Jerusalem Post said that 46,5 percent of Israelis would prefer a narrow coalition without the religious factions, compared with 39,5 percent who want to see a broad-based coalition.
The poll, conducted by the Gallup organisation, also found that 57,6 percent would support a national unity government including both Barak's One Israel and Likud. - Sapa-AFP