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Russian oligarch Arkady Gaidamak dropped a bombshell into the political arena yesterday when he announced that he is forming a new party that will run in the upcoming elections.

Gaidamak is president of the international Betar movement, a right-wing movement founded in the pre-state era by Ze'ev Jabotinsky and affiliated with the forerunner of the Likud, Menachem Begin's Herut Party. His aide told Haaretz that the new party would reflect Betar's goals and values.

But in an interview with Haaretz last night, Gaidamak said that his party would take a free-market economic stance, while on security and diplomacy, it would call for better understanding between Jews and Arabs in Israel and between Israel and its Arab neighbors. "Israeli-Arab relations have to be based on economic cooperation and development," he said.

Gaidamak's associates claim to have polls showing that the new party is already supported by 15 percent of the population - a higher rate of support than that enjoyed by Avigdor Lieberman, who has hitherto been the leading Russian immigrant politician. They added that they expect its support among the Russian immigrant community to be even higher, though they have not yet specifically polled this sector. However, other polls have consistently shown that a "Russian party" would receive only about three of the 20 seats that this sector controls.

In the days preceding his announcement - which he chose to make on Channel 9, a Russian-language television station - several parties had explored whether Gaidamak would be willing to join them. These included Labor, Likud, Prime Minister Ariel Sharon's Kadima Party and even Shas, an ethnic Sephardi party that has traditionally been at odds with the Russian immigrant community.

Gaidamak said that he will form his Knesset slate upon his return from Russia in another four days. He has also not yet decided on a name for the party: While he is considering calling it "Betar," he is not yet certain that this would be legal. "I shall consult my lawyers on this matter, and of course I shall respect any legal decision," he said.

Gaidamak hinted at his intention to enter politics in a meeting with Russian-speaking reporters six weeks ago, when he insisted that he was the real leader of the Russian immigrant community. But he said that he ultimately decided to found his own party due to the disarray in the Likud following Sharon's departure. He said he was also inspired by Amir Peretz's recent election as Labor Party chair. "If Amir Peretz can do it, so can I," he reportedly told his associates. "My education is no worse than his."

In addition, he said, he was goaded by remarks made by Knesset Speaker Reuven Rivlin in Haaretz Magazine last Friday. Rivlin, commenting about the fact that Gaidamak was chosen as Betar's president, said that in the old days, Betar was an ideological movement led by first-rate leaders such as Jabotinsky and Begin, whereas nowadays, it is led by Gaidamak, who "thinks that everything is for sale."