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Kadima's Shimon Peres has expressed reservations regarding interim prime minister Ehud Olmert's intentions to bring Avigdor Lieberman's Yisrael Beiteinu party into the coalition.

In closed talks with his circle of associates, Peres (who is slated to serve as deputy prime minister and minister for the development of the Negev and Galilee) has also expressed intense displeasure with the Israel Defense Forces hard-handed approach in the Gaza Strip against the Qassam launches.

Peres told associates that he is not very enthusiastic about the size of the coalition that Olmert seeks to put together - 84 MKs. According to Peres, such a coalition would require the establishment of a large and thus less effective political-security cabinet. A coalition of the size Olmert has in mind, Peres says, will make it difficult to navigate the government and will dilute the Knesset.

Peres says he is not opposed to Lieberman's inclusion in the coalition because of Yisrael Beiteinu's political plan, which involves an exchange of territory, but because of the man's crude style and attitude toward Arab citizens.

In 2001, Peres supported Labor's joining the first Ariel Sharon government, despite the fact that Lieberman and Rehavam Ze'evi were also in it.

In conversations with his associates about the IDF's recent operations in the Gaza Strip, Peres has said that the defense establishment must act with restraint toward the Palestinians and avoid escalating the situation.

Peres also believes that contrary to the prevailing assessment, the number of settlers who will be evacuated under Olmert's plan will be around 40,000 and not 70,000. Reality, Peres says, will require compromises that will reduce the number of evacuees and evacuated settlements.