Israel At the Brink

From the moment of its formation 19 months ago, Israel's coalition government seemed ominously fragile. The carefully crafted alliance called for Prime Minister Shimon Peres of the moderate Labor Party to rule for 25 months and then switch places with Foreign Minister Yitzhak Shamir, head of the rightist Likud bloc, for another 25 months. Last week an outbreak of name-calling and political pique showed just how delicate that arrangement could be by propelling the government into its latest crisis.

The trouble began two weeks ago, when outspoken Finance Minister Yitzhak Moda'i, a Likud member, blasted Peres in newspaper interviews. Moda'i, who holds degrees in engineering, economics and law, said Peres deserves no credit for bringing Israel's runaway inflation under control because the Prime Minister "knows nothing of economics and is by nature a man who gives in." Moda'i later called Peres "the flying Prime Minister" because of his many trips abroad, and accused Labor ministers of "cynical fraud" for bailing out businesses owned by Histadrut, the Israeli trade-union confederation.

Infuriated by the charges, Peres last week sought to fire Moda'i, thus triggering a bitter standoff. Shamir, who is scheduled to become Prime Minister in October under the coalition agreement, blocked Moda'i's dismissal and accused Peres of seeking to scuttle the political accord. When Moda'i offered to resign Wednesday, Likud ministers closed ranks. If Moda'i goes, Shamir vowed, "all Likud will go too, and Peres should know that in contemplating sacking Moda'i, he is in fact bringing down this government."

To avert a collapse, coalition leaders devised a complex face-saving formula. Under it, Shamir and Moda'i would swap jobs, with Shamir taking over the finance portfolio and Moda'i becoming Foreign Minister. The assignments would last until next fall, when Shamir becomes Prime Minister. Moda'i could then return to the Finance Ministry.

At week's end, however, the compromise threatened to unravel. Peres refused to sanction Moda'i's resumption of the finance post and again threatened to fire him, perhaps at a Sunday Cabinet meeting. That raised anew the specter of a government-toppling Likud walkout. But under Israel's parliamentary rules, the Likud would have to observe a 48-hour waiting period before taking action.