Ehud Olmert appears to be near forming his government -- Mahmoud Abbas may be near dissolving his, writes Graham Usher in Jerusalem According to several grapevines here, interim Prime Minister Ehud Olmert will present Israel's 17th government sometime next week -- well within the 28 days allowed for forming a government under the elections law. The cause of this speed is the ease with which agreements have been reached between the two main winners of Israel's elections last month: Olmert's Kadima Party and the Labour Party led by Amir Peretz. Following marathon talks between the two leaders last week "understandings" appear to have been pegged on portfolios and policies alike. Labour will receive seven ministries in the 27-member government, including Defence and Education. Kadima will have the choice of the rest, including the foreign and finance ministries. But there should be enough other bounties to entice the orthodox Shas movement (with 12 seats) to join, as well as the seven-MP Pensioners' Party. Jilted is the ultra-nationalist Yisrael Beiteinu (YB) Party -- not only because its leader, Avigdor Leiberman, is under criminal investigation; but because the YB is opposed to any unilateral Israeli withdrawal from the West Bank, the lodestone of Olmert's convergence plan. Should YB stay out -- and Shas and the Pensioners come in -- Olmert and Labour could have a 72-seat majority. The big surprise is the choice of Peretz over Kadima's Shaul Mofaz as defence minister. Given the social thrust of his elections campaign, most analysts assumed Peretz heart's desire would have been the Finance Ministry, with its power to slice from one sector and give to another. Nor has Peretz any meaningful military experience. Mofaz has been defence minister for the last three years, and before that was army chief of staff. Yet Peretz expressed "satisfaction" over the new dispensation. Is this innocence or experience? Detractors say Peretz is walking into fire. Over the next four years Israel's defence minister may have to take truly historic decisions: a "pre-emptive" strike on Iran, the re-conquest of Gaza or the eviction of isolated settlements in the West Bank. Failure in all or any will damage Peretz's stature irreparably. On the other hand, some say Peretz will provide just the civilian oversight the army needs; will cut its burgeoning budget down to size; and will hone a less brutal policy towards the Palestinians. Unlike Mofaz, Peretz believes Palestinian Authority President Mahmoud Abbas "must not be harmed in any way" even if the "Hamas government should be subject to an economic and international siege", says Peretz's aide, Ephraim Sneh. Whatever the quandary posed by Peretz at the Defence Ministry, analysts agree that Olmert has the coalition he needs to execute "convergence": his plan to determine Israel's permanent eastern borders by unilaterally annexing Jerusalem and the main West Bank settlement blocs while withdrawing from isolated settlements near densely populated Palestinian areas. Israel's emerging coalition "not only reflects a desire for stable government but a political direction", wrote Israeli analyst Sima Kadmon in Yediot Aharonot on 23 April. "Olmert is determined to carry out his convergence plan in the shortest time, and sees in the Labour Party the main partner for its implementation. There is no other coalition that can advance the plan". The plan is already well advanced. The election of a Hamas-led government -- and the dysfunction this has caused in the Palestinian Authority -- merely accelerated the process. Following the suicide bombing in Tel Aviv on 17 April, Olmert did not order a frontal assault on the PA -- despite Hamas's support for the attack. He tightened the financial noose on the authority and proceeded with separation. Israeli banks were told not to lend to their Palestinian counterparts, "one more notch in collapsing the Palestinian economy", said Palestinian analyst, Sam Bahour. And the northern West Bank was physically isolated from its south, east and western hinterlands. Combined with the international sanctions imposed on Palestinian finances, such measures sooner or later will bring about the PA's violent demise. This too is part of convergence, says Kadmon. "Sources close to Olmert believe terror won't harm his plan. On the contrary, the more terror attacks, the easier it will be to pass the plan, both internally and in the international arena. The Americans won't pressure us to return to the roadmap; anyone with eyes in his head will see there isn't a partner, that agreement is impossible and that Israel should take steps to benefit its security..." Olmert is scheduled to visit Washington in May. The only cloud on Israel's unilateralist horizons are the 3.5 million Palestinians in the occupied territories and who, should the PA collapse, will care for them. This is perhaps where Labour, Abbas and "the moderate stream he represents" comes in. On 24 April Yediot Aharonot ran a story predicting that Abbas -- "according to a secret plan worked out by Washington, Cairo, Amman, Saudi Arabia and Israel" -- would invoke his presidential powers and dismiss the Hamas government "by August". In its stead there will be an emergency PA government and/or new Palestinian elections, a kind of "democratic coup". There are some in Hamas who are convinced this is Abbas's agenda. They point not only to the powers he has amassed to the presidency since the PA elections. They say his current message on tour of several European capitals is less that sanctions imposed on a democratically-elected Palestinian government should be lifted than that aid should be redirected to him and his office. Nor will Hamas have been reassured by the president's comments to CNN Turk on 24 April when asked whether he was contemplating the government's dissolution. "Hamas is still acting as if it were opposition, not in government," said Abbas. "It has to face realities. It has to be in contact with Israel to meet the daily needs of the Palestinian people. The constitution gives me the right to dismiss the government but I don't want to use this power. Let's wait a while and see if it [Hamas] will change."
