ISRAELI CABINET IN CHAOS

Analysis by Peter Hirschberg

(IPS) JERUSALEM -- The Prime Minister and the Defense Minister are at each other's throats. The Foreign Minister and the Prime Minister are barely talking. And the Deputy Prime Minister, who wants to replace the Prime Minister, is already talking about what he might do if he does.

Israel's government is slipping ever deeper into a state of disarray. Corruption charges against Prime Minister Ehud Olmert and the calls for him to step down have heightened the sense that elections are just around the corner, largely paralyzing his ability to govern.

The result: Key decisions, like whether to accept an Egyptian-mediated truce with Hamas in Gaza, have become hostage to increasingly acrimonious political battles.

In comments clearly directed at Olmert, Defense Minister Ehud Barak said over the weekend that if not for political considerations, "a truce agreement with Hamas would have been reached a long time ago." The government, he added, was "incapable of making decisions in regard to Hamas, Syria, Lebanon, Iran or the United States. All the Cabinet discussions are directed at the media."

Barak, who is the leader of the Labor Party, has called on Olmert to stand down in the face of charges that he took hundreds of thousands of dollars in cash from a U.S. businessman. If he doesn't, Barak has vowed to push for early elections. It did not take long for the Prime Minister to hit back. With Barak sitting opposite him at a Cabinet meeting earlier this week, a furious Olmert insisted that political considerations had not played any part in his decision on whether to back a truce or a military operation in Gaza. "The things that were said on this matter were unnecessary and unfounded," he fumed.

Just two weeks ago, both Olmert and Barak were warning that Israel was on the verge of launching a major invasion of Gaza aimed at smashing Hamas and halting the firing of rockets by Islamic militants into Israel. Last week they decided against a military operation and said they were allowing more time for Egypt to mediate a truce, which is now set to go into effect on Thursday.

"The government, in its current condition, isn't exactly in a position to make strategic decisions," says Shlomo Gazit, a former head of military intelligence and now a senior research fellow at the Tel Aviv-based Institute for National Security Studies.

"They have no public support whatsoever, so they're playing for time," Gazit told IPS.

The decision on whether to accept the Egyptian truce proposal, he says, has broad strategic ramifications for Israel, which makes the government's paralysis deeply worrying. "It will impact on relations with Abu Mazen," he says, referring to Palestinian President Mahmoud Abbas, who heads the more moderate Fatah faction and with whom Israel is negotiating.

"It will also affect relations with Egypt," Gazit adds, referring to the extensive efforts Cairo has invested in trying to broker a cessation of hostilities in Gaza. "If Israel was to decide on a military operation, it would create a serious crisis with Egypt."

The absence of public backing for the government -- Olmert's approval ratings are barely in double digits -- is also the reason why few Israelis are taking the current talks between Jerusalem and Damascus seriously. After renewing talks last month, following an eight-year hiatus, the sides held a second round of indirect talks in Turkey earlier this week and announced that the contacts would continue. Aides to the Prime Minister have told Syrian officials that the corruption charges against Olmert will not affect the talks.

But with the government unravelling and Olmert looking like he could be out of the Prime Minister's office before the end of the year, he is currently in no position to negotiate a peace deal with Syria, let alone sell it to the Israeli public.

The sniping between Olmert and Barak is not the only indication that Israeli politicians have been intoxicated by the smell of an early election. Earlier this month, Deputy Prime Minister Shaul Mofaz, who hopes to replace Olmert at the head of the ruling Kadima party if the Prime Minister is forced to step down, warned that sanctions were not sufficient to deter Iran from developing nuclear weapons, and that an Israeli attack on Iran's nuclear facilities had become "unavoidable."

The comments resulted in a record 11-dollar spike in oil prices. But in Israel, Mofaz's remarks were viewed as nothing more than cynical electioneering, as an attempt to exploit a highly sensitive strategic issue to paint himself as tough on security ahead of a possible primary race for the leadership of Kadima.

Olmert is hoping that he can turn things around in a month's time when his lawyers cross-question Morris Talansky, the U.S. businessman from whom he is accused of receiving hundreds of thousands of dollars in cash-stuffed envelopes. If he can undermine Talansky's testimony, which was given last month, he is hoping he can forestall elections and bolster his government.

For now, though, the smart money is on elections by the end of the year, not on an agreement with the Palestinians or on full-fledged negotiations with the Syrians.