The Clinton administration, increasingly frustrated by Israel's reluctance to advance peace efforts with the Palestinians, has rejected a request from Mr Benjamin Netanyahu's government to delay the forthcoming mission to the region of its special Middle East peace envoy, Mr Dennis Ross.
Mr Netanyahu, fighting off his Foreign Minister, Mr David Levy's, threat to quit the government over its "unjust", "evil" budget proposals, had urged Mr Ross to postpone the trip.
But the American envoy is set to head to the region tomorrow as scheduled, anxious to press Israel into implementing an overdue withdrawal from at least 10 per cent more occupied West Bank land.
Mr Netanyahu, who was supposed to have had the 1998 budget approved by the Knesset before the end of 1997, is to try again on Monday to win a parliamentary majority for the legislation.
Emergency regulations actually grant him until the end of March to get the legislation through, but if he cannot mollify Mr Levy in the next few days, his coalition is likely to collapse.
The consensus on the government benches remains that Mr Levy is bluffing - that provided Mr Netanyahu finds several hundred million dollars in various aid and support programmes targeted specifically at the neediest Israelis, the constituency from which Mr Levy draws his political support, the Foreign Minister will consent to remain in government, and the threat of elections will be averted.
A conservative calculation establishes that Mr Levy has threatened to quit, talked about quitting, or had his aides issue resignation threats for him no fewer than half-a-dozen times since the government took office in June 1996.
This frequent resort to resignation melodrama is turning Mr Levy into something of a joke, certainly among his government colleagues, but it will be the Foreign Minister who laughs last if Mr Netanyahu capitulates to his demands and buys back his support.
The real butt of the joke, as the Israeli public is increasingly aware, is actually Mr Netanyahu himself.
Fully aware that Mr Levy's presence is crucial to the continuation of his premiership, and embarrassed in the past by the minister's carefully orchestrated resignation crises, the Prime Minister nonetheless signed a letter of budgetary commitments to Mr Levy six months ago and then blithely ignored it when the budget was being finalised in the last few days - guaranteeing himself a time-consuming, humiliating dust-up. It is no wonder that, in a poll published yesterday, just 23 per cent of Israelis expressed the desire to see his government remain in office, and even the stiff, lacklustre opposition leader, Mr Ehud Barak, stands 8 per cent ahead of Mr Netanyahu in the popularity stakes.
While Mr Netanyahu now tries to woo back his Foreign Minister, however, the true victor of the budgetary battle has already made off with his spoils. The Knesset member Mr Aryeh Deri, head of the ultra-Orthodox Shas party, long ago ensured the generous allocation of government funds to maintain the growing Shas school system and social welfare programme, and is now also broadening the party's appeal among the non-Orthodox working classes.
Shas, with 10 Knesset seats, is already the third largest political party in Israel. Unlike Mr Netanyahu's Likud, it would be delighted to see general elections advanced, since it stands to win 15 or even 20 seats, quite possibly overtaking the Likud. Mr Deri, who incidentally is fighting off a series of fraud charges in a longrunning trial, is arguably the cleverest man in Israeli politics. And the rise of Shas under his intelligent stewardship is quietly transforming Israel into an increasingly Orthodox society.
If Shas maintains its current rate of growth, - and the large helpings of government funding that Mr Deri has secured for the coming year will certainly help - the infighting between secular politicians like Mr Netanyahu and Mr Levy will, within just a few years, come to seem not only farcical but irrelevant, as Orthodox politicians take centre stage in steering Israel.
David Horovitz is managing editor of the Jerusalem Report.