Ministry of Finance and Histadrut labor union officials on Sunday broke off talks over the signing of a new wages agreement for local authority workers, citing major differences of opinion.

Talks at the Histadrut's Tel Aviv headquarters ended 15-minutes after they began, and no plans were made when they would reconvene.

Histadrut said it plans to declare a labor dispute next week that after a two-week "cooling-off" period could develop into a general strike disrupting government offices, local authorities, sea and airports, trains, mail, the Jewish National Fund and university administrative services.

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While Histadrut head Ofer Eini has yet to announce the union's demands, Finance Ministry official Eli Cohen said the treasury does not plan on agreeing to a pay-rise because workers' salaries had not eroded.

The Histadrut plans to ask a 10 to 13 percent salary increase be spread out over an extended period in order not to burden the budget. The raise will cost the budget some NIS 10-12 billion, the Finance Ministry expostulated.

Histadrut officials said local authority workers' salaries have not changed since 2001, with the exception of a single 3.6 raise. They added workers agreed to a 4 percent reduction in their salaries as part of the 2003-2005 market reforms agreed upon by former Histadrut leader Amir Peretz and former finance minister Benjamin Netanyahu.

Finance Ministry officials said Histadrut demands were "crazy" and mentioned their great cost.