Netanyahu makes u-turn as Sharon presents coalition

Benjamin Netanyahu, the arch rival of Israel’s Prime Minister Ariel Sharon, today accepted the post in the government that he had earlier spurned.

Sharon sacked the hawkish former premier from the foreign minister and offered him the finance minister role. Netanyahu at first rejected the offer as a demotion, but changed his mind today.

Political sources said Netanyahu had accepted the top Treasury job only after Sharon agreed to his demand for more powers within the new coalition.

The two men are bitter rivals and there were suggestions Sharon was either trying to sideline Netanyahu – or set him up for a fall.

Sharon today asked parliament to approve a right wing coalition government that is likely to make few concessions for peace with the Palestinians.

Two parties out of the four in the coalition oppose Palestinian independence. The charter of Sharon’s new government calls for continued “development” of Jewish settlements, even though it promises not to build new ones.

And the Israeli government’s action plan makes no mention of the so-called “road map” to Palestinian statehood by 2005.

It says the government will try to reach an interim deal with the Palestinians, provided the violence ends.

“The people of Israel strive for peace, and I am convinced that in exchange for true peace, there is readiness for painful concessions,” Sharon told MPs.

Sharon’s coalition consists of his hawkish Likud the National Religious Party, a leading patron of Jewish settlers in the West Bank and Gaza Strip, the National Union, some of whose members advocate the expulsion of Palestinians, and the more mainstream Shinui.

But even Shinui says peace can only be realised once Palestinian leader Yasser Arafat has been replaced.

Sharon’s new government will control 68 seats in the 120-member parliament.

He said their top priority would be to bring about Israel’s economic recovery, suggesting that efforts to end the conflict with the Palestinians would take a back seat.

Netanyahu, in his new role as finance minister, faces a daunting task trying to pull Israel out of a recession that has persisted in six of the past seven years and worsened due to more than two years of Israeli-Palestinian fighting.

Sharon said the Palestinians would have to carry out sweeping government reform before peace talks could resume.

And he said the Palestinians will also have to forego the “right of return” of four million Palestinian refugees and their descendants to Israel.

The Palestinians have refused to do so. They have also demanded the establishment a capital in traditionally Arab east Jerusalem. Disagreement on these two key issues led to the collapse of peace talks in 2001.