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The rift between Prime Minister Ehud Olmert and Defense Minister Amir Peretz was briefly suspended yesterday as the Prime Minister's Bureau tried to lessen the tension that came to a head in the wake of Peretz's phone conversation Sunday with Palestinian Authority Chairman Mahmoud Abbas. However, Olmert associates said there is still a major crisis of confidence and that the prime minister needs to make a decision about how to continue his troubled relationship with Peretz.

Sources close to the prime minister said that Olmert's relationship with Peretz needs to be reexamined, but that Olmert plans to do so without pressure. He is expected to take a look at the political ramifications of firing Peretz, particularly at whether it would cause the rest of the Labor Party ministers to resign as well - something Olmert prefers to avoid.

Political officials in Jerusalem said Olmert has not decided to fire Peretz, but when asked whether he had considered the move, one said: "He considered firing Peretz from the minute he met him." Another said Olmert is "looking longingly" at U.S. President George W. Bush's dismissal of his defense secretary, Donald Rumsfeld.

Peretz, for his part, has said he has no plans to resign. However, he has only weak support from fellow Labor leaders.

Despite efforts to relieve the tension, Peretz recognizes that his clash with Olmert has done him damage. Nonetheless, despite reports about the pressure the Labor Party is exerting on him and his lack of public support, Peretz has said he will continue to try to advance a political process.

The defense minister is trying to relay the message of "business as usual," but he is fully aware that if internal party politics become public, he will lose what is left of his legitimacy and need to make tough decisions. Peretz associates said he feels that almost all members of Labor's Knesset faction have turned their backs on him.

Over the last few days, the only senior Labor leader to stand by Peretz's side was the chairman of the Knesset faction, Yoram Marciano, and it appears that many are ignoring his distress.

"There's a limit to how much you can trample a person," said Marciano. "It borders on irresponsibility." Marciano said he is leaving the decision about how to act in Peretz's hands, and said that if Olmert fires the defense minister, the Labor Party will quit the coalition.

Olmert's bureau denied yesterday remarks made by security sources who said the prime minister rejected a Peretz-Abbas meeting because "no one will meet with Abu Mazen [Abbas] before me." The bureau officials said Olmert gave permission to Minister Tzipi Livni and Shimon Peres to meet with Abbas at the United Nations General Assembly some two months ago.

Responding to calls for his dismissal during a visit to the north yesterday, Peretz said, "I am busy doing. We are monitoring the preparedness and readiness of the Israel Defense Forces, in order to give the right answers. That is certainly more important to the people of Israel than any other statement."