The Knesset on Saturday rejected MK Amir Peretz's proposal to raise the minimum wage by 20% over 15 months to NIS 4,600 a month. The bill put forward by Peretz (Labor ) was joined by a separate bill to the same effect from Meir Sheetrit (Kadima ). That bill fell too.

After the vote, Peretz had some biting words for Finance Minister Yuval Steinitz. "You are a coward and the minion of employers in Israel because you're going to give them money they don't deserve," Peretz told the Knesset. "You're afraid to confront them. I'm a populist on behalf of Israeli society, but that's better than being a coward and a minion of the employers."

Rebutting Peretz's comments, Steinitz said that a vote for the law isn't a vote for the poor, it's a vote for unemployment.

Steinitz was looking out for industry and employers as well - mainly in the country's outskirts, he said. "Because I don't want Arad Towels to collapse all of a sudden. Thanks to Peretz's courage, Arad Towels would fall and its 500 Bedouin and new immigrant workers would be out of work."

Another 120 manufacturers in the periphery could also suffer the same fate, Steinitz added.

Peretz's legislative proposal fell in a vote 59 against and 39 in favor, even though he had a rainbow of parliamentarians on his side. Among the bill's supporters were Shelly Yachimovich (Labor ), Haim Katz (Likud ), Daniel Ben-Simon and Eitan Cabel (Labor ).

Interior Minister Eli Yishai and Housing Minister Ariel Atias were absent. They took care to offset their votes with two members of the opposition.

Sheetrit's bill fell by 57 against to 34 in favor.

The coalition, in principle, opposed the two bills, in part on the grounds of economic unfeasibility. All ministers were called on to vote against. Labor chairman Ehud Barak urged Peretz on Saturday to withdraw the bill and not raise it for voting, but Peretz, formerly the chairman of the Histadrut labor federation, refused.

Prime Minister Benjamin Netanyahu, currently on a visit to the United States, threw his weight behind the opposition to the bill.

During the debate ahead of the vote, Peretz lashed out at his party's chairman. "Barak doesn't care about the Labor Party .... But where are the ministers Yitzhak Herzog and Avishay Braverman? Labor's vote against the bill is the death of the party's social agenda."

After the vote, Barak clarified that he supports the concept of a roundtable debate on the minimum wage, meaning discussion by a forum of politicians and leaders from business and the Histadrut.