TEL AVIV, Feb 26: Israeli Prime Minister Ariel Sharon ousted hawkish Foreign Minister Binyamin Netanyahu in a surprise move on Wednesday after forging a new rightist coalition likely to toughen Israel’s line against the Palestinian uprising.

Silvan Shalom, until now finance minister, agreed to take on the foreign ministry in the coalition that Mr Sharon began forming after his right-wing Likud party’s election victory last month.

In a move clearly engineered to undermine his main internal rival in Likud, Sharon asked Mr Netanyahu to be finance minister. The former premier, who challenged Sharon for the Likud leadership last year, refused the offer, a statement from Sharon’s office said.

Shalom, 44, has little foreign policy experience. He is seen as loyal to Sharon and his appointment is unlikely to bring big changes to Israel’s foreign policy, foreign diplomats said.

“I don’t think this will make much difference to foreign policy. Sharon will strengthen his grip on foreign policy with a weaker person as foreign minister,” a senior European diplomat said.

Netanyahu’s future is now unclear. Israeli media said a senior Sharon aide had telephoned Netanyahu, urging him to reconsider his rejection of the finance ministry post and leaving open the possibility that he might remain in government.

If that failed, Sharon was expected to offer the finance ministry to Likud ally Ehud Olmert. Sharon said Defence Minister Shaul Mofaz and Education Minister Limor Livnat would remain in their current posts.

Likud reached a coalition deal early on Wednesday with the centrist Shinui party, the ultranationalist National Union party and the National Religious Party (NRP), a champion of Jewish settlements on occupied land.

The coalition parties signed an agreement giving Sharon a government with 68 seats in the 120-seat parliament.

PRESSURE ON SHARON: The inclusion of the right-wing parties will increase pressure on Sharon to take an even tougher line against the Palestinians and could make it even harder for international mediators to end 29 months of Israeli-Palestinian violence.

Sharon, who turned 75 on Wednesday, is expected to present the coalition to parliament, the Knesset, on Thursday. The new government’s main tasks will be to tackle the Palestinian uprising and confront a worsening domestic recession.

The Palestinians, seeking their own state, are wary of the proposed coalition because of the expected shift to the right.

“It is obvious from the nature of the agreements and the nature of the parties that the Israeli government will be a government of settlement activities, of more military escalations and incursions,” Palestinian cabinet minister Saeb Erekat said.

“The only thing that will be absent is the peace process.”

Sharon had tried to bring the centre-left Labour Party into the coalition to avoid being dependent on right-wing parties.

But Labour pulled out of negotiations on Sunday, saying it could not find a common basis with Sharon on dismantling some Jewish settlements and lifting the economy out of recession.

Labour’s decision left Sharon lacking the more moderate partner he sought ahead of anticipated US pressure for concessions to the Palestinians after any US-led war on Iraq.

There was no immediate word of fresh violence in the West Bank or Gaza Strip. A rare snowstorm, which kept occupied Al Quds under a blanket of snow for the second day, also hit the West Bank. —Reuters

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