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This week the die will be cast. Will Cerberus-Gabriel be allowed to buy the controlling interest of Bank Leumi? Will the bank's privatization fail again, leaving it in state hands for who knows how long?

Cerberus-Gabriel was allowed to buy 9.99% of the bank a year and a half ago, and was given a certain period of time to obtain regulatory approvals to buy 10.01% more.

The Bank of Israel has to rule whether the group meets the criteria for buying Israel's second largest bank. There are other regulatory issues as well.

The situation of Cerberus - which last week was deemed worthy to buy Chrysler from Daimler-Benz - is like that a guy who buys one shoe, then spends a year and a half walking around with it trying to prove that it's worthy to buy the other one.

You know what you can do with only half a pair of shoes. Nothing. Hence the suspense ahead of the deadline, May 24, when Cerberus' option to buy the next 10.01% expires.

If the deal falls through, which seems very likely, then accusations will fly.

At this stage, Cerberus is asking for more time to get all its regulatory ducks in a row. That may be a tactical ploy, intended to keep the information secret until the very last moment, in hope that the state will cave in under pressure and grant the extension.

The present process of selling off the state's share of Leumi is actually the first such experiment of its kind, which was intended to overcome the previous failed attempts. The previous process was based on an examination of the bidders, who, only if they were found to be acceptable, could be granted approval to purchase the bank.

In the present case, the state decided to sell off a chunk of Leumi, and then would determine whether the potential buyer was acceptable. Only then was the next chunk, which would allow the purchaser to take over control of the bank, offered up for sale.

This is a roundabout way of doing things, especially when added to a generally problematic privatization process.

The state may very well miss out on a group of the highest level foreign investors, who could significantly raise the level of competition and professionalism of Israeli banking.

The person who was supposed to be responsible for the sale of Leumi was Finance Minister Abraham Hirchson, but he's suspended while the police investigate whether he stole money from a nonprofit organization.

In this case, the responsibility moved to Prime Minister Ehud Olmert, as acting finance minister. But Olmert is also being investigated, actually about this very same bank - Leumi. Olmert is suspected of having changed the terms of the Leumi tender, so that his friend, the billionaire Frank Lowy, would win. (Lowy bolted before the final leg of the race.)

But somebody has to make a decision. Enter Rafi Eitan, the minister responsible for pensioners affairs, who has been given the Leumi privatization portfolio, as it were.

Like a cactus in your shoe

Eitan needs to take into account what Cerberus officials said last week during their visit here - that certain local businessmen are finding the idea of Cerberus controlling Leumi "uncomfortable".

The hedge-fund executives were possibly referring to some of Leumi's biggest borrowers, who today receive sweetheart treatment from the bank.

These businessmen feel at home at Leumi. They enjoy special status there - and they are likely to lose out on this special status if Cerberus gains control.

Could these comments directed at the likes of businessmen such as Nochi Dankner, Zadik Bino and the Ofer family?

All have complicated, big-money dealings with Bank Leumi, which include partnerships and financing agreements.

Maybe Cerberus is a bit uncomfortable with the fact that Leumi is both a partner and a big lender to Bino in Paz Oil. It is also a partner and lender to the Ofer family in the Israel Corporation, and with Dankner in Cellcom.

If this is true, then it must certainly reflect what Cerberus thinks about how the bank does business with these partners - and borrowers.

Cerberus might not necessarily cut such ties if it were to take over, but at the very least it could provide an example of the very interesting battle that could be shaping up: unsentimental foreign investors against the rich local tycoons who have enjoyed an open door policy at Leumi until now.