Yisrael Beiteinu Chairman Avigdor Lieberman on Wednesday rescinded his private bill to change the system of government in Israel.

Lieberman said he intends to build a wide parliamentary consensus on the bill and reintroduce it to the Knesset sometime next week.

Lieberman's bill calls for changing the system of government in Israel to a presidential regime, raising the minimum number of MKs per party to 10, and requiring a majority of 80 MKs to force the prime minister to resign.

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The ministerial committee for legislation approved the bill by a 5-4 margin Sunday. Labor ministers appealed the decision, and Lieberman was unable to garner a majority of MKs to support the bill in the Knesset.

Lieberman had made passage of the bill in the preliminary Knesset reading a precondition for bringing his party into the coalition.

"We felt it would be unfortunate to sacrifice the bill and thus delay the debate on the issue by six months," said Lieberman. "We therefore decided to form a wide consensus consisting of most Knesset factions.

"We intend to reintroduce the bill, along with an additional bill, next week and bring about the passage fo the idea in its entirety," Lieberman added.

Labor Party Chairman and Defense Minister Amir Peretz on Wednesday met with United Torah Judaism legislator Ya'akov Litzman in a bid to bring his party into the government coalition in order to keep Yisrael Beiteinu out.

Peretz also plans to meet in the coming days with Meretz Chairman Yossi Beilin to discuss the possibility of that party joining the coalition as well.

Speaking to reporters at the commencement of the meeting, Peretz said he wanted "the government's character to match our initial declaration, and that includes narrowing social gaps."

"The entry of UTJ and Meretz into the coalition could boost this plan, which is the social agenda for Israel in 2007," he said.

Litzman, who heads the Knesset Finance Committee, said he is yet to hear the terms offered to his party for joining the coalition. "We are negotiating and have several principles on which we will not compromise," he said.

"We are against civil marriage, we support ultra-Orthodox education and child support; the convergence plan is inappropriate at the moment. Should the government demonstrate flexibility with us we would consider seriously joining the coalition," Litzman added.

Kadima withdrew its own bill on the same subject, for similar reasons.

Peretz tries to persuade Olmert
At his meeting last week with Prime Minister Ehud Olmert, Peretz suggested going with UTJ and Meretz as an alternative to Yisrael Beiteinu, as this would add the same number of seats to the coalition - 11. Olmert, however, is not keen on the idea. He prefers Avigdor Lieberman, who has promised Olmert a rebel-free faction.

Peretz believes that the current coalition could be stabilized with UTJ and Meretz, and that these parties, unlike Yisrael Beiteinu, would not thwart diplomatic initiatives. He intends to fight to prevent Yisrael Beiteinu from joining the government, and told associates: "I am not afraid of resigning from the government if Olmert brings in Yisrael Beiteinu. I will not sit in a diplomatically stagnant government."

Sources close to Peretz rejected the notion that while Peretz publicly opposes Lieberman's entry, he would accede in order to keep his government post, due to his weakened position within the divided Labor Party. Peretz, said one source, does not feel threatened, and "will not compromise over this. Olmert must understand that he's serious."

Peretz has also begun taking steps to cement his power base and restore order within the Labor faction. Among other things, he is seeking detente with former prime minister Ehud Barak, and the two are expected to meet to discuss, among other things, scheduling primaries for the party's leadership. Under the party's charter, primaries are to be held in May 2007. Despite reports that Peretz will work to postpone the primaries, associates said that he does not fear a May ballot.

But Labor officials speculated that if Peretz does push to quit the government should Yisrael Beiteinu join, he might wind up with an internal fight on his hands: Some Labor ministers, among then Benjamin Ben-Eliezer and Shalom Simhon, say that Labor must remain in the coalition and resign itself to Lieberman's entry, since it is incapable of maintaining coalition discipline itself.

The matter will be settled by the party's central committee, the body with the power to decide on leaving the government. While a majority of faction members oppose Lieberman's entry, it is not self-evident that the central committee will agree, since Simhon and Ben-Eliezer carry substantial weight in that body.

The Olmert-Lieberman talks are slated to resume next week, after the prime minister returns from Russia.