The government of the Israeli Prime Minister, Mr Benjamin Netanyahu, suffered another setback yesterday in its efforts to win approval for the 1998 budget from a rebellious parliament, as calls for early elections grew.
The government failed to muster a majority in the full plenum to pass three sections of the £40 billion spending package, forcing them back to committee, a parliamentary spokesman said. It was the second time the government had failed to find a majority after a similar setback on Thursday.
The sections were not crucial parts of the budget but signalled that the government still had not been able to mobilise support within the eight-party ruling coalition for the budget.
One coalition faction - the Yisrael B'aliya party, backed by Russian immigrants - failed to appear for the vote. Three deputies of the Gesher faction of the Foreign Minister, Mr David Levy, voted with the opposition.
Deputies have until midnight tomorrow to approve the budget, which limits the deficit to 2.4 per cent of gross domestic product.
As parliament debated the package, calls were growing inside Mr Netanyahu's Likud Party and among his coalition partners for early elections, or at least to delay the budget vote to March.
The Internal Security Minister, Mr Avigdor Kahalani, leader of the Third Way faction, said he would table legislation next week to disband parliament and pave the way for early elections.
The Agriculture Minister, Mr Rafael Eytan, called for elections to stop small coalition parties from breaking the budget.
Some deputies, including the Communications Minister, Mr Limor Livnat, said they favoured holding off on the budget vote until the legally permissible limit of March 31st to enable parliament to cool off.
If the Knesset fails to vote a new budget by tomorrow, the 1997 budget framework remains in force for the next three months. At the end of that period, parliament must either approve a budget or the government falls automatically.
Most legislators are opposed to cuts in various social welfare benefits, principally for the state-supported health system. A bloc of right-wing deputies, however, hopes to use opposition to the budget to put pressure on Mr Netanyahu not to transfer more occupied West Bank land to the Palestinians.
Meanwhile, the Palestinian President, Mr Yasser Arafat, whose government is threatened with a no-confidence vote over corruption allegations, has accepted his cabinet's resignation five months after it was submitted.
"The president has accepted the government's resignation but asked the ministers to stay in positions until he makes the reshuffle," a spokesman, Mr Marwan Kanafani, said yesterday. But Mr Arafat did not set a date for the reshuffle.
A PLO official said it was the first time Mr Arafat had agreed to make changes in the cabinet. He had previously told members of his mainstream Fatah wing that he had no intention of making any changes.
The Palestinian Legislative Council suspended its sessions last Tuesday, giving Mr Arafat a week to carry out reforms and a cabinet reshuffle following a council report five months ago alleging some cabinet ministers misused funds.
The 88-member council, established last year, scheduled its first vote of no confidence in Mr Arafat's government for today.
Long into the night on Sunday, Mr Arafat met 60 council members from Fatah in the West Bank town of Ramallah. All had threatened to join in voting for the no-confidence motion unless Mr Arafat reshuffled his government and implemented long-ignored council resolutions.