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Prime Minister Benjamin Netanyahu is apparently retreating from his ambitious transportation-infrastructure plan. For months he has been steadfastly pushing the idea of laying a network of railways and highways, at a cost estimated between NIS 51 billion and NIS 83 billion. But the Finance Ministry, and others, have fought the plan vigorously and last weekend Netanyahu decided to pull back.

The premier and Finance Minister Yuval Steinitz met privately last Friday, and the two are now nearing agreement on a much more limited version of the transportation scheme, revised according to economic limitations. Discussions on the new, slimmed-down plan will start soon.

Officials in the Prime Minister's Bureau and other confidantes were shocked at this development, as Netanyahu had shown total support for the plan until now. He spoke out in favor of it at almost every opportunity, claiming it was important for Israel's future and would link the periphery to the center of the country.

The plan was scheduled to be approved by the cabinet on Feb. 21, at a special session to be held at Tel Hai in the Galilee.

Sources close to Netanyahu had a hard time explaining his reversal. Although they admitted there were sections of the plan that were less important and removable, they said it is still important and would stimulate the economy.

Netanyahu may be avoiding conflicts and trying to ensure his political survival, said the sources, which may explain why he has had difficulties making courageous decisions on controversial issues - even when they are justified economically and socially.

Sources in the Prime Minister's Bureau now think the alternative plan will be similar to the treasury's own scheme for transportation and infrastructure.