Sharon and Peres fail to reach coalition govt deal

Israeli Prime Minister Ariel Sharon and opposition leader Shimon Peres have failed to reach a final agreement on bringing the Labour Party into the government, a prerequisite to push through the withdrawal from the Gaza Strip.

Sharon, who lost his majority in parliament this summer after some coalition allies quit over the Gaza pullout, needs the moderate Labour for his planned withdrawal from Gaza and four West Bank settlements by the end of 2005.