On the eve of a crucial Cabinet meeting that is expected to determine the fate of Prime Minister Menachem Begin's government, both his Likud and the opposition Labor Party prepared today to submit motions to dissolve the parliament as soon as it is evident that Begin's coalition majority has crumbled.
If Finance Minister Yigael Hurvitz resigns Sunday in a Cabinet impasse over Israel's deteriorating economy -- as he is expected to do -- the stage would be set for a complex series of parliamentary moves to set national electgions months before Begin's term is due to end on Nov. 17.
If the coalition collapses, Begin can be expected to move to hold elections in June or July, thereby pushing the Likud's rule past the four-year mark, sources in the Likud said. Begin, who was elected in May 1977 and took office the following month, would be the first prime minister of Israel to serve an uninterrupted four years.
But the Labor Party, out of power for the first time in Israel's 33-year existence, may push for elections within 100 days.
Sources in both parties have sketched the following possibilities for the coming weeks aftger the dispute between Hurvitz and Education Minister Zevulun Hamer over a controversial 30 to 60 percent wage increase for teachers comes to a climax in Sunday's Cabinet session:
Hurvitz would resign and Begin would notify President Yitzhak Navon that he is unable to continue with a coalition majority made more precarious because of the expected defections of the three parliamentary members of Hurvitz's Rafi faction.
Begin then would be given 21 days to form a new coalition, but Likud Chairman Haim Corfu, anxious to head off a Labor Party motion for elections in 100 days, would introduce a government bill for elections in June or July.
A procedural fight in parliament would be likely over the issue of the terms and timing of dissolving parliament, and it presumably would have to be decided by Speaker Yitzhak Berman. The Labor Party could appeal to the High Court if it lost the ruling.
But the 12-member National Religious Party has indicated that it would be satisfied with June elections, as have members of the Rafi faction and other splinter groups.
Thus the Labor Party, faced with a choice between the certainty of June or July elections under the Likud bill and the prospect of a long fight to move the elections foward a few months, may decide not to oppose the Likud's motion.
In that case, a vote to dissolve parliament could be held as soon as next week, unless Begin decides to try to form a new coalition.
The Voice of Israel radio reported tonight that Hurvitz, in an interview, repeated his determination to resign from the Cabinet if any part of the controversial "Etzioni report" recommending salary increases for teachers is adopted by the Cabinet.
Begin, according to Israeli radio, reiterated his resolve to submit his resignation and seek new elections if the crisis is not resolved during the meeting.