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Ministry of Finance and Histadrut labor union officials on Sunday broke off talks over the signing of a new wages agreement for local authority workers, citing major differences of opinion.

Talks at the Histadrut's Tel Aviv headquarters ended 15-minutes after they began, and no plans were made when they would reconvene.

Histadrut said it plans to declare a labor dispute next week that after a two-week "cooling-off" period could develop into a general strike disrupting government offices, local authorities, sea and airports, trains, mail, the Jewish National Fund and university administrative services.

While Histadrut head Ofer Eini has yet to announce the union's demands, Finance Ministry official Eli Cohen said the treasury does not plan on agreeing to a pay-rise because workers' salaries had not eroded.

The Histadrut plans to ask a 10 to 13 percent salary increase be spread out over an extended period in order not to burden the budget. The raise will cost the budget some NIS 10-12 billion, the Finance Ministry expostulated.

Histadrut officials said local authority workers' salaries have not changed since 2001, with the exception of a single 3.6 raise. They added workers agreed to a 4 percent reduction in their salaries as part of the 2003-2005 market reforms agreed upon by former Histadrut leader Amir Peretz and former finance minister Benjamin Netanyahu.

Finance Ministry officials said Histadrut demands were "crazy" and mentioned their great cost.