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In their meeting Sunday with President Moshe Katsav, leaders of Yisrael Beiteinu did not make any recommendation regarding the most suitable candidate to form the next government. However, the party wants to be part of the coalition and is already working out formulas to bridge its foreign policy gaps with Kadima.

One of Yisrael Beiteinu's options is to demand that Acting Prime Minister Ehud Olmert impose Israeli sovereignty immediately on the Jewish settlement blocs that are to remain under Israeli control under Olmert's convergence plan, while withdrawing from Palestinian territories. This would allow the party to say that the operation was not a unilateral withdrawal but rather an exchange of territory, which is one of the pillars of Yisrael Beiteinu's platform.

It should be noted that the two parties differ on their definition of settlement blocs, but not so much as to prevent them from sitting together in the coalition.

Yisrael Beiteinu faction chair MK Yuri Stern told Katsav Sunday that at this stage, the coalition plans of both Olmert and Labor Party chair Amir Peretz are too vague for the party to recommend either one.

Stern told Haaretz that Olmert has enough MKs to form a government without Yisrael Beiteinu, but the economic costs are prohibitively steep.

"We have social welfare demands too," Stern said, "but in contrast to the demands of other parties, they are overwhelmingly aimed at helping people to join the labor force."

Behind the scenes, Yisrael Beiteinu is preparing for the possibility that it will remain in the opposition, and perhaps even head it, with support from the National Union. An agreement along these lines was reached even before the election, and in any event party officials believe that the depth of the resentment against Likud chairman Benjamin Netanyahu will guarantee them the NU's support as opposition leader. There is no obligation to give that role to the largest opposition party, which is Likud.