Yishai cancels meeting with Livni due to personal reasons

Shas party chairman Eli Yishai cancelled a meeting with Prime minister-designate Tzipi Livni on Wednesday evening in which the pair were to discuss the ultra-Orthodox party's demands for entering the next coalition.

Yishai said the cancellation was due to personal reasons, and was unrelated to the negotiations. The pair were to attempt to bridge differences between their positions, mainly over Shas' demand for another NIS 1.5 billion for child allowances, an issue the party says is a deal-breaker.

Kadima MK Tzachi Hanegbi told Israel Radio earlier Wednesday that Livni, the Kadima chairwoman, will not hesitate to call early elections if Shas presents demands that are considered too extravagant.

Hanegbi, who is considered one of Livni's trusted aides, said there is no point in establishing a coalition without Shas, since such a government would likely not remain in power for an extended period of time, according to Israel Radio.

A day after Kadima and Labor signed a coalition agreement, Shas is hardening its line for its own negotiations.

"The Labor-Kadima agreement distances Shas from entering the government," a senior Shas official said.

The official also said that the senior status accorded Barak, and Labor's veto right for agenda issues, were a cynical attempt by the party to push through its worldview.

Kadima and Labor signed a deal late Monday night, after 17 hours of negotiations.

"The option of a narrow government without Shas doesn't scare me," Yishai told Haaretz Tuesday.

A narrow coalition would face a dilemma: It would have to face a strong opposition, including Shas, Likud and Yisrael Beiteinu, or go to elections.

Associates of prime minister-elect Livni said Tuesday that she had a good shot at bringing Shas into the coalition. They also said she was going to try to persuade Likud's Benjamin Netanyahu to change his mind and join.

However, Netanyahu continued looking for ways to torpedo the new coalition, meeting with Shas spiritual leader Rabbi Ovadia Yosef on the eve of Sukkot.

Livni on Tuesday spoke with Yishai, who is industry, trade and employment minister, and the two agreed to meet in the coming days.

Meanwhile, Shas and Kadima negotiating teams will continue to meet.

If talks move ahead with Shas, Livni is likely to ask President Shimon Peres for an extension on the alloted time to form a government.

Kadima's team is also meeting with United Torah Judaism, which wants both increased child allowances and the Finance Committee chairmanship.

As opposed to Labor, which agreed to receive immediately only NIS 150 million of the NIS 950 million pledged to it, and to spread funding for seniors over three years, Shas said it wanted "the lion's share" of its "family grants" in 2009. "We will have to pay, but not that much. Solutions can be found," Livni responded.