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Shas Chairman Eli Yishai stepped up his party's threats yesterday to resign from the government over the ongoing peace talks with the Palestinians, warning against moving forward in the peace process as long as terrorism against Israelis continues.

"If there is any diplomatic progress in the negotiations with Palestinians beyond the current situation, while we are still under fire from Qassams and West Bank incidents, Shas will quit the government immediately," he said.

Shas has taken a tougher stance on diplomatic issues since the right-wing Yisrael Beitenu party walked out of the coalition. Shas said two weeks ago that talks on Jerusalem would constitute a red line, and has demanded that other core issues like permanent borders and refugee be kept off the table as well.

Yishai met with Prime Minister Ehud Olmert two weeks ago, telling him that even the intention to include Jerusalem in the peace talks would prompt Shas' immediate resignation.

Yishai, who serves as minister of Industry, Trade, and Labor, demanded that Olmert clarify the goals of the negotiations in general, and on Jerusalem in particular.

He added that he expects to be updated in advance regarding any developments in the talks between Foreign Minister Tzipi Livni and chief Palestinian negotiator Ahmed Qureia.

Shas' spiritual leader Rabbi Ovadia Yosef backed Yishai, saying the party "would not divide Jerusalem and not sit in the government that divides Jerusalem."

On Thursday, the Shas MKs intend to tour the City of David in Jerusalem to express its commitment to the capital and make its diplomatic intentions clear. The tour will be held jointly with the National Religious Party.