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The coalition negotiations between the Labor Party and Tzipi Livni's Kadima ran into trouble Tuesday after Labor called off a meeting between the two negotiating teams at the last minute. The two sides were supposed to draw up a draft of an agreement.

The next meeting will only take place on Friday, after Yom Kippur.

Labor chief Ehud Barak's advisers felt the agreements proposed by Livni's team were very different than what Barak and Livni had agreed on between themselves.

One of Barak's close advisers said that "in such a situation there is still no basis for an agreement, and it was a waste [of time] to meet. The documents we received were insulting. They were just pleasant statements, but we will not settle for general talk. This is not a fake crisis, it is completely real, and if Kadima does not take our demands seriously, then despite what they think - there will be elections."

Livni's advisers expected to be able to reach an outline of an agreement, and possibly even draw up a final deal at night. A member of Livni's team said it was a shame and a waste of time that the meeting was canceled, especially in light of the global economic crisis.

The crisis broke out Tuesday after Barak and Livni had agreed Monday night to try to reach an agreement last night, and the two negotiating teams received reinforcements to meet the challenge. Histadrut labor federation chairman Ofer Eini joined Barak's negotiating team, but during the afternoon, Eini phoned former cabinet secretary Yisrael Maimon, one of the leaders of Livni's team, and told him: "We are not coming."

Livni's staff say they do not understand why such an important meeting was canceled and that the proposals they gave to Labor were extremely generous.

The proposal included a detailed mechanism for joint work between Livni and Barak. For example, it proposed that no issues be brought before the cabinet unless the two leaders agree on the issue. If the two don't agree, they would give themselves another two weeks before the matter could be brought to the cabinet for a vote.

On the issue of blocking Justice Minister Daniel Friedmann's initiatives, the Kadima proposal said all such matters would be advanced only if both parties agreed.

However, Labor said its economic demands were not met, as well as other requests such as its desire to lead the peace negotiations with Syria.