Strategic Threats Minister and Yisrael Beitenu Chairman Avigdor Lieberman on Friday said Labor Party Chairman Amir Peretz is both stupid and a racist, as the war of words between the two ministers continued to escalate.

On Thursday, Peretz, who is leading a move to appoint the first Arab minister in Israel's history, described the appointment of MK Raleb Majadele as a response to what he called "Lieberman's racism."

Speaking to Israel Radio on Friday, the Yisrael Beitenu leader said that "Amir Peretz's speech [on Thursday] before the Labor Party Central Committee proves that he is stupid and a racist."

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Lieberman made the comments a short time before the central committee approved Majadele's appointment as science, culture and sport minister.

Lieberman said that he is not opposed to the idea of appointing an Arab minister to the government, but that the timing of the purported appointment shows that Peretz does not care for the Arab sector but rather that he is making cynical use of state authority in internal power struggles within Labor.

The minister for strategic threats reiterated his comments from earlier this week, that every day Peretz remains as defense minister is a serious blow to national security.

In a move that may prove to rain on Labor's parade, Interior Minister Roni Bar-On (Kadima) said Friday that Prime Minister Ehud Olmert might not allow a Labor Party member to fill the post.

Bar-On told Israel Radio on Friday that right-wing party Yisrael Beiteinu, which is often accused by left-wing politicians of espousing racist attitudes toward Arabs, is also eligible for another minister and might be the party to get the science, culture and sport post. If that should happen, Majadele would still be a minister, but would not have a portfolio.

Majadele said that was not good enough.

"I am confident that the prime minister will see the appointment of the first Arab minister in the State of Israel - a minister with a portfolio, with authority - as being to the benefit of the Israeli government and the entire Israeli society," Majadele told Israel Radio on Friday.

If he does get the appointment, Majadele would be replacing former Labor minister Ophir Pines-Paz, who quit some three months ago over the inclusion of Avigdor Lieberman and his Yisrael Beiteinu party to the coalition.

The Prime Minister's Office said Thursday night that the vote on Majadele's appointment was not on the agenda for Sunday's weekly cabinet meeting. Majadele said he had no problem waiting for the appointment, but did have a problem with the idea that the ministerial post in question might not go to the Labor Party at all.

The central committee vote was very close, with 253 out of 488 members voting in favor of the appointment. Some 225 members voted in favor of the recommendation made by Druze party activist Shakib Shanan, No. 20 on Labor's Knesset list, to place the authority to appoint new ministers in the central committee's hands.

Peretz had in the past said he intended to appoint Shanan to the post of minister, but ultimately chose Majadele.

Labor's chairman addressed the central committee on Thursday and asked the committee members to support Majadele.

"All eyes are on the party," Peretz said. "Everyone wants to see whether we will take this opportune moment that fell into our hands and send out an important message - not only to the committee, but to all of Israel - a message of equality and peace in the Middle East."

"This is a historic event and we must not miss it. Appointing an Arab minister is our decisive response to Lieberman's racism," he added.

Peretz presented Majadele's appointment as his response to the inclusion of Lieberman in the coalition, but party members maintained that the appointment was actually a ploy to expand Peretz's support within the Arab constituency and improve his chances to win the next party primaries.

Peretz's associate MK Yoram Marziano commended the central committee's decision and said "this is a victory for Amir." He added that Peretz had managed to overcome "attempts made by the other candidates for party leadership to prevent the historic event of the appointment of an Arab minister in Israel from taking place."

At the start of the committee meeting, Shanan burst onto the stage, snatched the microphone from the hand of Labor Party Secretary-General Eitan Cabel, and demanded a secret ballot on the matter of minister appointment.

Cabel later said that Shanan's outburst was completely unnecessary, since the decision to vote in a secret ballot had already been made.