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Ousted, Peretz Could Emerge Kingmaker

Jerusalem – No matter who wins the upcoming runoff between Ehud Barak and Ami Ayalon, this much is clear: Defense Minister Amir Peretz is out as Labor Party chairman — and the leader of Israel’s venerable social democratic movement will once again be an Ashkenazic general.

Peretz finished third Monday in the first round of Labor primary voting. It was a dramatic and definitive defeat, coming just 16 months after Peretz, a Moroccan immigrant who came from a development town and had no significant army experience or academic degree, upended Israel’s political system by assuming the helm of the party long associated with the country’s European-born founders. Some observers had seen Peretz’s victory as a chance not only to end the Sephardic community’s historical disdain for Labor, but also to return the party to its socialist and unionist roots at a time when Israel is experiencing both soaring poverty rates and widening economic gaps. Now, his defeat has left Labor voters with a choice between two Ashkenazic generals produced by the kibbutz movement.

“It is very sad,” Ha’aretz analyst Daniel Ben Simon said. “At the time, there was a feeling that the Labor Party had made an internal revolution, changing its agenda, bringing new voters and opening itself to new directions. Now, Amir Peretz’s failure has paved the way for the party to go backward and be led by the generals with all their security priorities. The school of thought that sees our existence in terms of military confrontation is back; it’s alive and kicking.”

Yet, despite Peretz’s loss this week, some observers are predicting that he still might be able to make good on his pledge to bring about the “social revolution” that he promised upon winning the Labor primary in November 2005.

“If Peretz plays his cards right, he will still be central to the party, so his social agenda will still be around,” said Ben-Gurion University professor Fred Lazin, an expert on politics and government.

Tension was high Monday throughout the tight race between Ayalon and Barak. But despite a high turnout of 65.5% of the eligible voters — who showed up at polling stations around the country on a workday — neither candidate reached the 40% threshold needed to claim victory in the Labor primary. For the next two weeks, the two former kibbutzniks will be campaigning furiously for the vote of every one of the 103,498 Labor Party members in a runoff expected to take place June 12.

Barak finished first, with 34.2 % of the vote. Following was Ayalon, who trailed slightly behind with 31.7%. In the runoff, the 21.8% who backed Peretz could prove to be the key swing voters.

“After everything he went through in the last year, he stayed in the picture and he will remain a senior minister in government,” said Eitan Haber, an Israeli journalist and commentator at Yediot Aharonot. Haber served as director of former prime minister Yitzhak Rabin’s office. “He will be the kingmaker. With 21%, it’s enough for him to say, vote for Ami Ayalon or Ehud Barak. If only 5% or 6% listen, that’s already enough.”

On Tuesday morning, Ayalon’s camp asked for a meeting with Peretz.

It appears that Peretz is leaning toward Ayalon, a former naval commander who served as chief of Israel’s Shin Bet internal security services. Throughout the primary campaign, Peretz reserved his verbal attacks for Barak, saying that the former military chief of staff had already failed in his earlier stint as prime minister by allowing Hezbollah to build up its force along the Israeli-Lebanese border. According to Peretz, as well as the commission set up to evaluate Israel’s performance in last summer’s war in Lebanon, the hands-off policy in southern Lebanon adopted by Barak and continued by his successor, Ariel Sharon, contributed to Israeli failures.

“Barak will have to do some serious sweating to win over the Peretz voters,” Labor’s secretary general, Barak loyalist Eitan Cabel, told Israel Radio.

On a personal level, Ayalon may have an easier time with Peretz. Having eschewed Barak’s high-flier campaign style in favor of traversing Israel for weeks to argue his case face to face with Labor supporters, Ayalon is said to have won the respect of Peretz.

But if either candidate wants to secure Peretz’s backing, he will need to guarantee the defeated Labor leader the job he now wants — and which many critics say he should have taken in the first place — that of finance minister.

If Peretz had been handed the finance ministry instead of the defense ministry, as he first demanded from Prime Minister Ehud Olmert in coalition talks slightly more than a year ago, things might have looked very different for him and his party today.

The finance ministry, political observers say, would have provided Peretz, previously the leader of Israel’s main labor union federation, with the only suitable platform for delivering on his promise for a fundamental shift away from the privatization, tax-reducing and benefits-cutting policies of previous governments. Other domestic-oriented ministries, such as Housing and Welfare, have budgets that are too small to effect serious change.

In the end, though, Olmert handed the highly desired finance ministry to his close confidant Avraham Hirchson, and Peretz concluded that his only other path to the premiership was to accept the post of defense minister.

“His strategy might have worked if he had been defense minister for three or four years,” said Lazin, who heads the department of politics and government at Ben-Gurion University. “He could have been prime minister. But there was a war within a couple months, and it ruined him.”

The Winograd Commission, established to evaluate Israel’s performance in last summer’s war against Hezbollah, shelled out blistering criticism of Peretz, Olmert and Israel’s then-military chief of staff, Dan Halutz.

Now, however, Peretz could have another chance at advancing his social economic agenda. Earlier this year, Hirchson resigned as finance minister after being questioned by police about allegedly stealing money from March of the Living, a well-known Holocaust-education organization.

Peretz promised last month that he would exchange his defense post for the position of finance minister.Whichever of the two final Labor Party leader candidates agrees to give Peretz that post in a coalition shake-up will most likely win his support.

Peretz won in poorer areas, including Ashdod, Bat Yam, Rosh Ha’ayin and Sderot.

A key constituency will be Arab Labor Party members, who gave Peretz 34.4% of their vote, surpassing Barak’s 33% and Ayalon’s 11.9%.

In 1999, Israeli Arabs threw their support behind Barak, who was seen as following in the footsteps of former prime minister Yitzhak Rabin, whose government invested millions of shekels in the Arab sector. But they abandoned him in 2001, when he ran against Sharon, because they held him responsible for the killing of 13 Israeli Arab youths by Israeli security forces in riots four months earlier. Now, it appears, they are returning to Barak in droves.

Ayalon, largely an unknown to Israeli Arabs, could face an uphill battle with them given his former post as director of the Shin Bet. Peretz, who implemented the decision to appoint the first Arab minister of Israel, Ghaleb Majadle, faced no such difficulties.

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