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A short man wearing a rabbinical judge's coat sat on Wednesday at the east wall of the Hazon Ovadia rabbinical college in Jerusalem's Romema industrial zone.

The man is the head of the yeshiva. Although unknown to most Israelis, he is the glue that is keeping Prime Minister Ehud Olmert's government together. He is Rabbi Yitzhak Yosef, son of Shas spiritual leader Rabbi Ovadia Yosef.

People in the ultra-Orthodox Sephardi party say Ovadia's eagerness to make his son chief Jerusalem rabbi is one of the main reasons for Shas to remain in the government. The ultra-Orthodox press and street posters blast Shas leaders for staying in Olmert's government.

Industry, Trade and Labor Minister Eli Yishai, the Shas chairman, told a Shas meeting that Rabbi Ovadia Yosef rejected his opinion that Shas should quit the government over the peace talks with the Palestinians, according to the Kehila ultra-Orthodox weekly. "When our leader makes a decision we are his soldiers and must carry it out," Yishai is quoted as saying.

Six weeks ago, cabinet minister Yitzhak Cohen was appointed religious affairs minister. This ministry was reestablished to ensure that Cohen carries out his most important project - appointing Rabbi Ovadia's son Jerusalem rabbi. The first stage took place in September, when Olmert signed new regulations at Shas' request for appointing city rabbis.

However, the High Court of Justice suspended the regulations and Cohen is under great pressure from Rabbi Ovadia to change this. Cohen keeps telling Yosef that he is on the verge of appointing his son chief Jerusalem rabbi.

But it is doubtful whether this will happen. Yishai knows that Cohen can do nothing - that's why he was in favor of quitting the government, Shas people say.

Jerusalem has had no rabbi since 2003, when both its chief Sephardi and Ashkenazi rabbis died. No rabbis have been appointed since then, among other things due to the collapse of the city's religious council, which is part of the rabbi election apparatus.

Rabbi Ovadia requests frequent updates from Shas leaders on their progress in making his son Jerusalem's Sephardi rabbi, sources close to Yosef's family say. Rabbi Ovadia has even broached the subject in personal conversations with Olmert.

Olmert changed the regulations to dramatically increase the religious affairs minister's power in electing city rabbis. In the past, each city and its religious council had the power to elect the city rabbi. Now the religious affairs minister has direct or indirect control of three of the five members of the rabbis' election committee.

This committee is tasked with approving each city's election assembly - the forum that elects the city rabbis. It consists among others of synagogue managers and representatives of the local authority.

The new regulations were supposed to pave Rabbi Yitzhak Yosef's way to the capital's rabbinical seat. But the Union of Local Authorities (ULA) petitioned the High Court against the regulations, arguing that they were depriving the local authorities' ability to determine who would serve as rabbi. The local authorities finance most of the rabbis' wages.

The High Court suspended the regulations and sent Cohen to reach an agreement with the petitioners. The debates held on the regulations in recent weeks have been fruitless.

Earlier this month, ULA representatives demanded that the religious affairs minister's authority to appoint the election committee be revoked.

The ULA people also sought new criteria for city-rabbi candidates, including military service and a police record clean of crimes involving moral turpitude.

MK Uri Ariel (National Union-National Religious Party) and Jerusalem's opposition leader, Nir Barkat, filed another petition to the High Court. They said that the regulations turn the city rabbi's election into a process "reeking of improper political appointments" instead of basing it on democratic representation.

They argued that the regulations give the religious affairs minister considerable unjustified power.

The court sent Cohen and his people to talk to the petitioners in this case too.

Shas appears to have realized that it would not reach an agreement with the petitioners to enable Yosef's appointment. When the meeting with Ariel and Barkat failed as well, Yishai phoned Barkat, urging him to compromise and withdraw his appeal. They told him how important appointing a Jerusalem rabbi was to Rabbi Ovadia.

Barkat said he would compromise if Shas assured him that at least one of Jerusalem's chief rabbis was not ultra-Orthodox and had done his military service.

"Our insistence is ideological. Most of the city's residents are not ultra-Orthodox. It is unthinkable that it should have two ultra-Orthodox rabbis," he said.

The municipal elections in Jerusalem are scheduled for the end of the year, which may put Rabbi Yitzhak Yosef's appointment off until after November.

"Shas' chances of appointing its own man rabbi of Jerusalem are slim," a source familiar with Cohen's efforts told Haaretz. "It will not happen in the near future."

A senior Shas source said that "no appointment will make Shas remain in a government that fails to adhere to the Torah Sages Council's decisions about the peace talks on Jerusalem."