Long-Time Israeli Leader Ousted

Israel inched closer to early elections Thursday after a fiery Moroccan-born union leader edged out elder statesman Shimon Peres to become Labor Party leader, shaking up Israeli politics and breaking through a longstanding ethnic barrier.

Politicians and commentators deemed the upset victory as Israel's biggest political development since 1977, when Labor first lost power after 29 years of unchallenged rule.

"It's not an upheaval, its a revolution," political commentator Daniel Ben-Simon said.

The surprise victory by Amir Peretz, 54, reflected deep discontent with the country's European-descended elite, which founded Labor and has dominated the party from the outset. In ousting Peres, the new Labor leader — who grew up poor in an outlying Israeli desert town — wrested control of that elite's most hallowed institution.

After trailing badly in polls, Peretz took the prize with slightly over 42 percent of the vote, to just under 40 percent for Peres. Former party head Binyamin Ben-Eliezer placed third with less than 17 percent.

Prime Minister Ariel Sharon telephoned Peretz Thursday morning to congratulate him. The two will meet next week, Peretz said, and he plans to ask Sharon for early elections.

Peres had not yet telephoned Peretz, and at a morning appearance, did not discuss his loss, saying only, "I have nothing to be ashamed of."

Peres led Labor into a coalition with Sharon's hardline Likud Party this year to provide the support necessary to withdraw from the Gaza Strip. Withdrawal opponents in Likud had threatened to stop the plan, and without Labor, the pullout would have foundered.

With the withdrawal completed, Peretz says there's no reason for Labor to stay in a government he accuses of pursuing untrammeled capitalism.

"The Labor Party's ability to become an alternative to those who now govern can be fulfilled only if we return to ourselves," he said after his victory, alluding to Labor's socialist roots.

Just this week, the rifts that still exist after the Gaza withdrawal were demonstrated again when Likud rebels prevented passage of a Sharon-backed bill. If Labor bolts his coalition — as Peretz says it will do — the prime minister would be hard-pressed to keep his government together.

A Labor defection could force elections before their scheduled November 2006 date. Sharon called Peretz to congratulate him, and Peretz proposed that the two meet next week to discuss early elections.

Interior Minister Ofir Pines-Paz of Labor cast doubt Wednesday that senior party officials, led by Peres, would back Peretz's push to leave the government. If early elections were called, eight senior members, including Peres, would have to step down from coveted positions of Cabinet ministers.

The walrus-mustachioed labor leader is known nationally for union activism and is a member of parliament, but has held no leading political role, and can boast no storied military career. This background could put the already flagging party at a disadvantage against the popular Sharon in national elections.

Peretz said Thursday that it was too early to say when Labor would quit the government, but that the party would formulate its position within a few days.

Labor is reviled by Sephardi Jews from Middle Eastern countries and their descendants, who feel they were discriminated against by a patronizing European-born, or Ashkenazi elite.

"And from this public emerges a proleterian prince who takes over the party and becomes its owner," Ben-Simon told Israel Army Radio. "And this is a sign that he will bring (to the party) not only the immigrants, but all those who are on the fringes and felt this party never spoke to them on their level, but always looked down on them."

Peretz is Sephardic.

In his victory speech, Peretz declared that "the death of the ethnic demon is good for Israel. If there is a public enemy, it is the ethnic demon. It is our No. 1 enemy."

Opinion polls had forecast a resounding victory for Peres in Wednesday's primary. But after two exit polls gave conflicting results, party activists hunkered down for a long night.

Peres called a surprise early morning news conference to say he suspected fraud had occurred in the vote. Peres did not directly accuse Peretz of foul play, but said reports of wrongdoing had to be checked.

Party officials rejected the fraud claim, clearing the way for a Peretz victory. Peres appealed the release of results.

The defeat was a major embarrassment for the 82-year-old Peres, who had enjoyed double-digit leads in opinion polls, and cemented his image as a perennial loser.

Peres said Thursday he would prefer for Labor to stay in the Sharon government for the next year, but acknowledged elections could be moved up to early 2006. "I would prefer to spend the next year continuing to build peace and strengthening the economy, rather than campaigning," Peres said.

While Peres, a Nobel peace laureate, is widely revered abroad, he has had trouble connecting with Israeli voters and failed in five previous elections for prime minister.