Peres loses Labour vote to union chief

A DRAMATIC upset in the Labour Party’s leadership contest has revolutionised Israel’s political landscape, after a fiery union leader notched a surprise win over Shimon Peres.

The loss by the elder statesman could endanger the country’s shaky governing coalition.

Amir Peretz has promised to pull Labour out of Prime Minister Ariel Sharon’s government, raising the likelihood of early elections. The defeat also could spell the end of Mr Peres’s distinguished, six-decade political career.

Party secretary Eitan Cabel, announcing Mr Peretz’s victory, said the Labour leader captured over 42% of the vote, while Peres took just under 40%. A third candidate, former party head Binyamin Ben-Eliezer, got 17%.

Mr Peretz, a Moroccan immigrant whose father toiled in a kibbutz factory, now takes over Labour, the bastion of Israel’s eastern European elite.

“This is the moment we bury the ethnic demon in Israel,” Mr Peretz declared in his victory speech.

The outcome will have deep implications for Mr Sharon’s shaky coalition.

Mr Peres, a former prime minister who is now vice-premier, wanted to keep Labour in government until elections scheduled in November 2006.

He led the party into the governing coalition this year to shore up support for Mr Sharon’s plans to withdraw from the Gaza Strip. The pull-out divided Mr Sharon’s Likud Party and without Labour’s support, the plan could not have been carried out.

Mr Peretz wants to steer the party back to its socialist roots, pull out of the coalition and force early elections.

His message resonated with Israelis disenfranchised by government cuts in social spending and the country’s growing gap between rich and poor.