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The Histadrut labor union declared an official labor dispute in the public sector yesterday.

After a 14-day cooling-off period stipulated by law, the union will be entitled to hold work disruptions in the public sector, which comprises 700,000 employees. The sanctions could include a general strike.

The reason for the dispute is the failure of negotiations conducted this week between the treasury's supervisor of wages and employment agreements, Eli Cohen, Histadrut chairman Ofer Eini, and heads of six professional unions.

Cohen rejected the Histadrut's demand for a 10-13 percent wage increase for employees in the six represented sectors, claiming that the salaries under discussion have already increased by a real 1.5 percent over the past year due to previously agreed-upon automatic raises.

If a general strike were to take place, it would include all government employees including those from local authorities and government companies.

The Histadrut intends to include in a strike former government companies that have been privatized such as El Al, the oil refineries and Bezeq.

However, the management of these firm will almost certainly go to labor court to prevent their employees from striking or taking other action. The companies claim their employees no longer work for the state, even if they are covered by the same collective bargaining agreements.

Israel Civil Aviation Authority (ICAA) workers yesterday entered the third day of their strike, claiming that Israel's international aviation ties may be harmed soon.

The employees accused Transportation Minister Shaul Mofaz, his director general, Gideon Siterman, and the head of the ICAA, Udi Zohar, of running off to the Paris Air Show and "prefering to eat caviar and sip wine" rather than deal with the issues behind the strike.

The ICAA's 60 workers are protesting what they claim are unilateral actions taken by management to reorganize the authority without cosulting employees.

In additional strike news, 1,000 workers in one of the new government office buildings in Jerusalem went on strike yesterday, claiming that it is impossible to open the building's windows, which has caused a large number of workers to become sick.

The treasury responded that it is taking action to improve conditions in the building, and there is no reason to strike.