The Jerusalem District Court threw ultra-Orthodox politics into turmoil Thursday after it barred Aryeh Deri from running for Jerusalem mayor. The move raised concerns that the former Shas chairman might try to regain the party's helm and undermine the standing of its current chairman - Industry, Trade and Labor Minister Eli Yishai.

Kadima officials said they believe that Yishai may prefer holding general elections in the near future while his position as chairman is secure. He would thus forgo entering a new coalition government, seeking to avoid elections two years from now when Deri's standing in the party might be stronger.

"[The court decision] is bad for [Foreign Minister Tzipi] Livni and good for [Likud leader] Benjamin Netanyahu because Yishai knows he'll be part of a government under Netanyahu," a Kadima official said. Yishai's aides, however, called this analysis "rubbish."

"The only thing that counts is the child stipends," a Shas representative said. "If Shas gets its funds for impoverished families then it will be in the government, and Livni is welcome to test us."

Deri, who retired from politics after being found guilty in 2000 of taking bribes, fraud and breach of trust, is nearing the end of the period in which he is barred from politics. He is still very popular in his party's ranks.

Meanwhile, Shas officials said they made some progress in talks with representatives of newly elected Kadima leader Livni. They said they have made their demands to Livni and are waiting for her to act.

Another ultra-Orthodox party, United Torah Judaism, was skeptical Thursday over whether it would join a coalition under Livni. The UTJ is asking for child allowances to be increased; it also wants the chairmanship of the Knesset Finance Committee, a position the party had held for years.

Livni has met with the committee's current chairman, MK Avishay Braverman, to prevent a fallout with the Labor politician.

Livni Thursday continued talks with Labor officials, trying to build on the momentum after an informal dinner with Labor chief Ehud Barak on Wednesday.

"If ties between Livni and Barak strengthen, we can solve all the other problems and issues," a Livni aide said.

Associates of Barak said the two still disagreed over major issues, particularly Labor's budgetary demands and its opposition to Justice Minister Daniel Friedmann's proposed reforms of the judiciary.