Israeli coalition talks crumble; elections may be called

Israeli Foreign Minister Tzipi Livni's hopes of becoming the second woman to lead her nation suffered a serious setback Friday when a critical political partner refused to join her in a new ruling coalition.

The ultra-Orthodox Shas Party's decision makes it more likely that Israel will have to hold snap elections, which could propel Likud Party leader Benjamin Netanyahu back into power.

Both Livni and the U.S.-educated Netanyahu have negotiated with the Palestinians, but Netanyahu is more hawkish, for example insisting that all of Jerusalem must remain in Israeli hands and calling for a pre-emptive attack to prevent Iran from obtaining nuclear weapons.

Livni, who recently succeeded Israeli Prime Minister Ehud Olmert as leader of the ruling Kadima Party, said that she would call for new elections Sunday if she couldn't win enough political support.

On Friday, Shas rebuffed Livni's latest offer, leaving her with few options.

Livni could still sweeten her deal to Shas, which has two central demands. The first is a restoration of child-support payments that benefit the party's core ultra-Orthodox supporters, many of whom are poor with large families. Shas also has sought assurances that Israel wouldn't relinquish control of parts of Jerusalem to the Palestinians in any peace deal.

Livni, who is Israel's lead negotiator in the Palestinian peace talks, agreed to the child-support payments, but she wouldn't meet the demands about Jerusalem, said Eli Yishai, the leader of the Shas Party.

“Shas cannot be bought,” Yishai told Israeli reporters Friday. “We stick to our principles. … Jerusalem is not for sale.”

Should Livni's last-ditch coalition moves fail, Israel will head into a new election season that could see the country turn to the right. If elections were held today, most polls suggest that Netanyahu, a former Israeli prime minister, would win the most support.

Livni assumed control of Kadima last month after Olmert was forced out amid a cloud of political corruption.