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Talks between secondary school union chiefs and the treasury deadlocked Tuesday, when Finance Minister Roni Bar-On rejected a demand by teachers that the eventual wage agreement also encompass the issues of a decrease in classroom size and a hike in teaching hours.

Ran Erez, the head of the Secondary School Teachers' Association, made the demands in a heated meeting of the the Knesset Education, Culture and Sports Committee meeting.

The secondary school teachers' strike entered its 36th day on Tuesday.

Bar-On said during the meeting that he is willing to increase teachers' salaries, but only in the framework of a reform agreement, not in a collective bargaining agreement. "We know that there is a problem with the teachers' work conditions, and we are committed to a salary hike."

"We declared that the government is interested in lowering the number of students per class, and it will carry out a multi-year plan to do so," Bar-On continued. However, he said that including the plan in a collective agreement is "in opposition to government authority, and hurts the ability of the government to rule. It's the collapse of the economy."

Erez said that his organization is prepared for a reform. "We want a reform, and we've tried to carry one out." He called on the government to reinstate teaching hours that were cut in recent years. "You took teaching hours when the government was in economic distress, and now it is prospering - return the hours you took," he demanded.

Erez added that his organization does not demand an immediate change, but is ready to agree to a five-year plan to lower class sizes and increase teaching hours.

Government sources involved in the negotiations have said that the teachers are likely to be given two options to choose from: either focusing on reducing class sizes or working to restore the classroom hours that have been cut over the past several years.

The proposal is based on the assumption that an agreement in principle has already been reached over the teachers' third demand, a 10 percent salary increase.

Officials in the Secondary School Teachers Association said in response to the report that they will not back down until all three of their principal demands are met. "The treasury still doesn't understand what our fight is about," Erez said Sunday.

"The way to break through the negotiations' impasse is by deciding which goal to achieve," a source said. According to figures compiled recently by the Education Ministry, the cost of reducing class size from 40 to 35 students will exceed NIS 3 billion.

Sunday's meeting was attended by Education Minister Yuli Tamir, senior treasury officials and Erez, as well as Histadrut labor federation chairman Ofer Eini, acting as mediator. The 90-minute meeting ended badly, with government officials accusing Erez of refusing to discuss added work hours for the teachers in exchange for their wage hike. "Erez apparently still hasn't calmed down from last night's rally and he doesn't want to conduct real negotiations," one source said.

"The treasury isn't willing to discuss the reforms in secondary education, insisting on talking only about wages - and having us return to teach in crowded classrooms and with too few instructional hours," Erez countered.

He said that an 8.5-percent wage increase was agreed on previously, but issues remained concerning the timing of the raise as well as the extra hours the teachers would have to work. "That's why we offered to put it aside and go forward with talks on reducing class size. The treasury refused on the grounds that the demand could not be included in a collective bargaining agreement. We said O.K., so let's discuss the return of [classroom] hours - but we were faced with rejection on that, too," Erez said.