Outgoing Communications Minister Moshe Kahlon (Likud) is expected to decide in the next few days whether he will form a social justice-oriented party to run in the January 22 Knesset elections. Kahlon reportedly told associates that if he headed his own party, he would oppose Prime Minister Benjamin Netanyahu's social and economic policies.

Kahlon's associates said Netanyahu's decision to have Likud run jointly with Avidgdor Lieberman's Yisrael Beiteinu party increases the likelihood that the next government will implement a "brutal, aggressive and capitalistic policy."

If he establishes his own party, Kahlon will probably still support Netanyahu for prime minister but would act to moderate the Likud leader's social and economic policies, they said.

Kahlon's supporters have commissioned another public opinion poll to assess the number of Knesset seats the minister could win as the leader of a socially oriented party.

Haaretz reported on Wednesday that a poll conducted earlier this week by the Rafi Smith Institute projected a party led by Kahlon would get 20 Knesset seats.

The poll also projected that if Kahlon and former Kadima party leader Tzipi Livni joined forces to run on a united Knesset ticket, they could win 26 seats in the next Knesset.

Kahlon's associates believe these figures are unrealistic. However, if Kahlon obtains his own political and parliamentary power base, he could lead a faction in the Likud and try to change the government's social policy, they said.

In the last 24 hours Kahlon has been seriously weighing the possibility of heading an independent party - something his associates are urging him to do. They financed a poll - conducted on Wednesday and Thursday - to assess his prospects.

On Tuesday evening, Kahlon attended a political conference of Yemenite Likud members, where he was reported to have told a number of people that he was indeed considering setting up a new party, but had not yet reached a final decision.

The last poll was not commissioned directly by Kahlon, but the survey's findings were presented to him privately at his request. Kahlon has apparently spoken about his potential plans with Livni and other political figures, including some in Likud.

The poll specifically looked at Kahlon's electoral prospects. Polls of this nature, which focus on one particular individual, tend to overestimate the candidate's political support, observers said.

The center and left parties were fired up on Wednesday by speculations that Kahlon would "defect" from Likud and run with a new party in the elections.

Poll: Labor gets 32 seats if Kahlon joins

Although Kahlon and Labor leader Shelly Yacimovich have apparently not been in contact, Labor conducted a poll to assess the number of Knesset seats it could gain if Kahlon joined the party. According to the results, Labor could soar to 32 Knesset seats, tying Likud Beiteinu, the new joint list formed by Likud and Yisrael Beiteinu.

"This poll proves Netanyahu's victory is not a sure thing. Nothing is clear yet. Kahlon is merely an example of something that could change the power balance," a Labor source said.

On Wednesday, Yacimovich openly supported Kahlon's return to the political arena. "Kahlon is an excellent public representative. I think his leaving Likud is significant," Yacimovich said in an interview to the Galei Yisrael radio station.

"I very much want to see him in political life. Kahlon's entry into the political arena serves the same cause I'm fighting for - ending the dichotomy between left and right in foreign affairs. There are no longer two blocs...it's all a fixation," she said.

But political pundits point out that Kahlon is a pronounced rightist in foreign affairs and has never withdrawn his support from Likud. If he forms a separate party, it will have a rightist orientation in foreign affairs and on the Palestinian issue, though it might lean to the left in its social policies, they said.

Another possibility is that Kahlon would join former Kadima leader Tzipi Livni's list. Livni is said to hold Kahlon in high esteem. Haaretz has learned that the two spoke to each other before the Smith Institute poll was conducted, but that they did not discuss running together in the elections.

Livni met Wednesday with former Kadima head and prime minister Ehud Olmert to consider various political scenarios, including the prospect of the two running on a joint ticket headed by Olmert.

The two didn't reach any decision, but at the end of their Tel Aviv meeting they issued a statement calling for a change in Israel's leadership. Sources close to Livni say she was planning to announce within several days that she will be running in the upcoming elections, without waiting for Olmert to make his decision.