Peretz set to fight election on poverty, not peace process

Amir Peretz, the Israeli Labour Party's new leader, plans to force the agenda to domestic Israeli issues and away from relations with the Palestinians in preparation for a general election which could now be as early as the end of February.

Mr Peretz will try to identify growing measures to combat poverty and social deprivation among lower-income Israelis as the key dividing line between himself and Prime Minister Ariel Sharon, one of his most senior allies indicated yesterday. The Labour leader, who triggered the election by ending Labour participation in Mr Sharon's Likud-led coalition, said after the Prime Minister, who had planned to go to the country next November, was now "adamant" elections should be held as soon as possible.

Morocco-born Mr Peretz, leader of the country's trade union federation, added: "I will let him decide the date within the period of the end of February and the end of March. Any date he decides is okay with me." Mr Peretz said he hoped a date would be announced before Monday when the Knesset will start dissolving itself. A poll in yesterday's Maariv newspaper shows that, within a week of Mr Peretz being elected and with the campaign still undeclared, Labour's rating has already improved enough to give it five extra Knesset seats if Mr Sharon remains as leader of Likud, 27 to Likud's 38.

If Mr Sharon's main rival, Benjamin Netanyahu, were leading Likud, the parties would tie at 33 seats, a finding which may well increase Mr Sharon's chances of remaining at his party's helm. Mr Sharon is expected to decide in the next few days whether to remain in Likud or form a new party to bypass his right-wing rebels.

Yuli Tamir, the Labour Knesset member who ran Mr Peretz's leadership campaign and is certain to play a leading role in a Peretz administration, said she expected "social issues" to be a dominant part in the campaign. Mr Peretz has already said he wants a near-doubling of the £2.15 an hour minimum wage.

Ms Tamir said approaches to negotiations with the Palestinians were less likely to loom so large because the differences between the formal positions were "small", given that Mr Sharon is formally committed to a Palestinian state and a return to the internationally agreed road-map to peace.

If elected, Mr Peretz, is expected to approve completion of the controversial West Bank separation barrier. Ms Tamir said the new leadership was "very critical" of the policies pursued under Mr Sharon by Mr Netanyahu, the former finance minister, "which in the past few years gave advantages to the very few, the very rich and pushed a significant proportion of the population below the poverty line".

Mr Peretz, a founder member of Peace Now, called last week for early negotiations and said he "would not rest" until there was a lasting settlement with the Palestinians.

But Ms Tamir, when pressed on whether this would not sharply differentiate him from Mr Sharon, said: "At least what Sharon declares he will do is not different from what Amir says he will do. The difference is that Amir will do it, and with Sharon, I don't know whether he will do it or not."

Though Ms Tamir did not say so, Mr Peretz' strategy appears to be to legitimise his position on peace talks among the more hawkish of potential supporters, without also compromising it, by pointing to Mr Sharon's public commitments.

Ms Tamir said Mr Peretz's campaign was "probably the last chance" for Labour to "break out of a close circle" of middle-class Ashkenazy support and reach out to lower-income immigrants including hundreds of thousands from Arab countries who tended to support Likud.

One left-of-centre analyst said Mr Peretz had a chance of emulating Menachem Begin's success in 1977 as Likud leader, when he harnessed just such support to overturn a Labour hegemony seen as fossilised and corrupt. Even Mr Peretz has said he wants to be the "Menachem Begin of the Labour Party".

Ms Tamir ridiculed suggestions that Mr Peretz was trying to return to 1940s socialism, rather "humane capitalism", saying that as US President Bill Clinton had raised the minimum wage. The differences, she said, would be closer to those between US Demo-crats and Republicans.

Ms Tamir also said the Maariv poll showed a jump in support for Labour among Russian immigrants to more than 8 per cent from 2.5 per cent. She said the immigrants were "one of the major audiences we are going to appeal to to make the Labour Party relevant to different groups".