Prime Minister Ehud Olmert criticized the opposition during his speech at the Knesset on Wednesday, saying that "whatever negotiations we hold you will call it 'surrender,' because you do not want peace."

In a special session dubbed by the opposition as "the government has reached its end," acting coalition chairman Yoel Hasson charged that "it is not the end of the government. It is the end of your hope. You are simply f-r-u-s-t-r-a-t-e-d. You are despondent. [Opposition head Benjamin] Netanyahu is the man of 'nearly,' the winner in the surveys, the 'sort of' prime minister," Hasson goaded his colleagues in the opposition.

But the show was stolen in a debate between Knesset Speaker Dalia Itzik and Gideon Sa'ar, Likud faction head.

The two are among the few who, on a normal day, run the affairs of the Knesset. The day-to-day discourse between the two is what preserves the 'official' image of the parliament from deteriorating to chaos.

"This is a coalition of cowards, and last night's agreement is an agreement of cowards," Sa'ar declared in his speech, describing the accord between coalition partners Kadima and Labor that nullified Labor's support for the dissolution of parliament.

"You are scared to death of elections," Sa'ar said. "Laborites ¬ once more you have proven to be wimps. Biggest wimps of all."

Itzik demanded that Sa'ar take it back, and agree to remove the statement from the transcript. He refused to be censored. Itzik ordered his removal from the podium. Likud claimed that "this was an ugly example of gagging."

The deal struck between Olmert and Labor Party chairman Ehud Barak late night Tuesday put off indefinitely a vote on the dispersal of the Knesset, which was scheduled to be held Wednesday.

The crisis was staved off after Olmert pledged to hold party primaries in Kadima no later than September 25. In exchange, the Labor Party withdrew its support for dissolving parliament

Olmert said during the Knesset session that the opposition has offered no alternative agenda to the current coalition, saying: "You might be enraged or alarmed by the government's agenda, but it doesn't absolve you of presenting a viable alternative."

The prime minister said his government was geared toward making peace and criticised the opposition as automatically rejecting every initiative on that level.

"We're making an effort to negotiate a peace deal with the Palestinians and any other Arab country that would wish to engage in peaceful negotiations with us. The negotiations with the Palestinian Authority are serious, responsible and genuine in a way that they haven't been for years," Olmert said.

He also told the Knesset about his meeting with Egyptian President Hosni Mubarak a day earlier, in which the two leaders discussed the impending deal for the release of Israel Defense Forces soldier Gilad Shalit, who has been in Hamas' captivity for over two years.

He also said that he decided to call in a vote in cabinet on the prisoner swap deal with Hezbollah.

"The release of the abducted soldiers is a top priority," he said.

Kadima primaries by September 25

Olmert and Barak had engaged in all-night mediation efforts to postpone a vote on the preliminary reading of a bill to disperse the Knesset. Earlier this week, the Labor Party faction agreed it would support dissolving the Knesset, prompting Olmert to threaten dismissals of Labor ministers in the government who supported the move.

According to the compromise, Olmert agreed to set a date for a primary in Kadima no later than 25 of September. To prove his intentions, he will call for a Kadima faction meeting Wednesday. At the meeting, the faction will vote on changing the party charter in order to allow for the primary.

At the same time, the faction will decide on holding a party council meeting by July 21 (after the cross-examination of U.S. fundraiser Morris Talansky, scheduled for July 17) in order to approve the change in the charter and to set the date for the primary. Thus, Olmert can decide on his political future.

Barak, for his part, can present the compromise as an achievement, and claim he managed to get Kadima to set a date for its primary.

The indirect negotiations between Olmert and Barak were led by the chairman of Kadima's committee for party matters, MK Hanegbi and Kadima Council head, Rishon Letzion Mayor Meir Nitzan. Nitzan and Hanegbi met Tuesday in separate private meetings with Barak, and got the impression that he was open to the compromise. Barak stated he would agree to the deal so long as it included creating the appropriate institutions in Kadima to advance the primary date during the next week.

Nitzan and Hanegbi passed this on to Olmert, and told him that most of the members of the Kadima faction were urging him to reach a compromise and did not want the Knesset to be dispersed.

Based on the Kadima charter, Olmert is the only official who is authorized to call a faction meeting. Another way to do so is by collecting signatures from 20 percent of the Kadima Council, which has 180 members. However, such a step would be considered a dismissal of Olmert for all intents and purposes, and therefore Kadima wants his agreement for the meeting.

Senior Kadima officials said Barak and Olmert understood that there was no real ideological difference between them, just an ego struggle.

"Olmert was hurt by Barak, who acted unilaterally against him and created a very serious crisis of confidence in political and security matters," one of the officials said. "That's why [Olmert] threatened dismissals, because it's impossible to continue leading like this. Barak also understood that he went too far and that his brutal process is not politically wise, because it's not worth it for him to go to elections now."

Olmert associates said that Tuesday morning, officials spoke to Olmert, telling him they had spoken to Barak and had got the impression that he was looking for a way out of his call to disperse the government, that would look like an achievement for the Labor Party and would allow Labor ministers to vote against the dispersal of the Knesset. The associates said Barak had asked for a target date for the primaries.

Olmert associates said the Prime Minister's threat to dismiss the Labor ministers who voted against him was meant to bring order to the coalition, in order to let Olmert function. In addition, Olmert is trying to convince Shas not to vote in favor of dispersing the Knesset, although the Prime Minister's Bureau said the government would not accede to Shas' demands to increase child welfare benefits. Olmert's bureau said another method had been found to fund the poor.

Shas, however, insisted, "If there are no benefit payments, we will vote in favor of dispersal."

Coalition deal meets fierce criticism

The decision to put a vote on dissolving the Knesset was met with fierce criticism by other party MKs, however, including Likud chairman Benjamin Netanyahu, who called the current coalition an "opportunist" body, focused more on politics than security.

The late-night coalition was unanimously approved by the Kadima affairs council. Faction whip Tzachi Hanegbi said he hoped it would mean "a new page" for the government, whereby lawmakers might focus on necessary action.

During the special session on Wednesday, Knesset Speaker Dalia Itzik cut short Likud MK Gideon Sa'ar's speech and ordered him to step down from the podium.

Itzik's exceptional move came after Sa'ar attacked Labor ministers over the agreement signed with Kadima early Wednesday morning, calling them "rags." Itzik, in turn, interrupted his speech and asked to remove his statement from the protocol, prompting Sa'ar to tell her, "Don't shut me up."

Addressing the House shortly afterward, Opposition Leader Benjamin Netanyahu slammed Itzik's move and said that it infringed on Sa'ar's right to freedom of speech.

"The freedom of speech is the essence of democracy," Netanyahu said.

Earlier Wednesday, opposition lawmakers lashed out on Wednesday against Olmert and Barak hours after the two men reached a compromise averting a Knesset vote on its dissolution.

Likud officials accuse the Labor Party chairman of not abiding by his promises, just as he did in the aftermath of the release of the Winograd committee report on the government's management of the Second Lebanon War.

"How can Barak sit in the Olmert government after saying that [Olmert] is not fit for the job and cannot continue in his role?" a Likud official said.

Likud MK Reuven Rivlin added that Olmert is doing all he can to cling to the levers ofpower, but everyone knows that he has reached the end of the road.

"The compromise between the two parties was reached on the back of the public," said Likud faction chairman Gideon Sa'ar, who stressed that the Likud will continue to undertake efforts to bring down the coalition and that it will not join unity government.

"The Labor Party continues with its stinking maneuvers and shady political deals instead of taking care of the important issues, including the threat foreseen from Iran and the Gilad Shalit matter," Yisrael Beiteinu chair Avigdor Lieberman said. "The government has adopted insane steps as a policy and it is impossible to trust it."

Shas chairman Eli Yishai said his party would not support any coalition that does not increase child allowances.

"There is a clash of ideologies between those who are in favor of the children and those who are acting against the children," Yishai, the minister of trade and industry, said. "It appears the public will have to decide between these ideologies. The children of Israel will have child allowances before the Jewish new year."

MK Zevulun Orlev (National Union - NRP) accused Barak of "zigzagging and spitting in the face of the citizens of Israel."

"Olmert, the envelope-receiver, and Barak the breaker of promises have crossed all bounds of cynicism with the stinking maneuver that they have hatched together," Orlev said.

Meretz MK Zahava Gal-On accused the Labor Party of enabling a prime minister under investigation to continue in his post for a few more months instead of demanding an alternative government immediately.

Meretz chairman Haim Oron, on the other hand, praised the agreement between Labor and Kadima. "[The deal] was the order of the day," he said. "It's a shame that they struck it at the last minute. Instead of going to elections, there should be a new government during the current Knesset that can advance the peace process and deal with social ills."