Tiny Party Shows Large Clout on Settlements

Palestinian workers building new homes last year in the Jewish West Bank settlement of Betar Illit, where Israel this week refused to halt construction. (By Sebastian Scheiner -- Associated Press)

But Shas hailed the new construction as a major triumph. "The prime minister accepted our demands," said Yakov Margi, leader of Shas's 12-member delegation in the Knesset, Israel's parliament.

Olmert's coalition government now has 67 members in the 120-member Knesset. Shas's influence underscores the importance of smaller parties in Israel, which has a system of proportional representation that makes it virtually impossible for any single party to gain a majority of Knesset seats.

Because Shas has much to gain from such a crucial role in the coalition, some observers dismiss its threats to bolt as mere bluster. But Margi said Shas's line in the sand is Jerusalem. United under Israeli control for the past 41 years, the city cannot be divided again, he said. "Jerusalem is the heart of the Jewish people," Margi said. "I don't know a Jew with a brain who talks about dividing Jerusalem."

Shas made its threat to bolt from the government in November, on the eve of the Annapolis conference launching the most recent U.S. peace efforts, and has repeated it since. The Annapolis process is intended to resolve the core issues dividing Israel and the Palestinians, including Jerusalem. The Palestinians, who want East Jerusalem as their capital, have said that the city's future is on the table.

Margi said it will be up to Yossef and his council of rabbis to determine when Olmert has crossed the line and whether Shas should then pull out. "He is the decider," Margi said.

Relatively dovish during the government of Labor Prime Minister Yitzhak Rabin, the party became more hawkish after the hope of the 1993 Oslo agreements soured. But other ultra-Orthodox groups and some secular parties don't consider Shas hawkish enough and blame the party for giving Olmert room to pursue a peace process that they see as fundamentally misguided.

"They are making a big mistake," said Binyamin Elon, chairman of the National Union party, which does not support the creation of a separate Palestinian state as proposed under the Annapolis process.

Israel's left, meanwhile, insists that Olmert could survive without Shas and that the party's threat to quit is just a cover for the lack of progress in the negotiations.

"Shas is a political excuse for Olmert not to take risks," said Chaim Oron, the new leader of the dovish Meretz party. Meretz is part of the opposition, but Oron said his party would support Olmert if it meant achieving a peace deal.

Still, Meretz has only five seats, compared with Shas's 12, so that would not be enough for a majority. In any case, Olmert seems in no mood to endanger his coalition at a time when opinion polls show he would lose badly in new elections to Likud leader Binyamin Netanyahu, a sharp critic of Annapolis who advocates greater military measures to counter threats of Palestinian violence.

"The prime minister sees Shas as an important partner in his coalition. And he thinks retaining a stable coalition at this time is very important. The last thing Israel needs right now is political instability," said Regev, Olmert's spokesman. "The prime minister will do everything in his power to both maintain a stable coalition and move forward with the peace process."

But Ami Ayalon, a minister from the Labor Party, said those goals might prove incompatible. "The faster he goes on diplomacy in order to empower his Palestinian partner, the sooner he will lose his coalition," Ayalon said. "He will have to take risks with his coalition in order to achieve something."

Special correspondent Samuel Sockol contributed to this report.