The gentle throaty rhythm of his voice fills the air with a seamless stream of parables, jokes and fatherly gestures which entrance his audience. Men at rows of desks nod quietly. And in the women's gallery brightly scarved and hatted heads are pressed up against a wooden mesh as the voice meanders on to talk of laws of the sabbath. 'You must never run to the synagogue even if you are late.'
This is Rabbi Ovadiah Yosef, the first Sephardi ultra-orthodox rabbi in Israel to have broken away from the domination of the Ashekanzi rabbis and forged his own independent political and religious following. He has tapped new sources of power, among poor Sephardim, who constitute the majority of Israel's underclass.
His is a 'fundamentalist' appeal for a return to Sephardi glory after years of suffering discrimination at the hands of Ashkenazi, or East European, Jews. 'He speaks to the simple people. He goes down to the nation,' said Leah, a Moroccan-born Sephardi.
With this support, Rabbi Yosef has built up his own political party: Shas. And he has chosen to exercise his new power by joining the secular left-leaning coalition of Yitzhak Rabin, the Prime Minister, as the only religious party in government. The Shas-factor is becoming increasingly important in Israeli politics and could be crucial in determining the outcome of Mr Rabin's peace moves.
In a highly significant ruling at the same small synagogue last week, Rabbi Yosef spelt out his view that it is permissible under Jewish law (halacha) to return Israel's 'biblical lands' in exchange for a peace treaty - if to do so would save Jewish lives. 'Everything he says is holy,' said Naomi, a Yemeni Jew, with deep olive skin and a tight white scarf looped round her long hair.
'He is the greatest scholar. He gives us the law. Even if you don't agree it would be wrong to disobey him. He has the light of the Torah shining on his face.' Others are less sure. 'He did not say this was a law. I would not give back land,' said Reuven Cohen.
If Rabbi Yosef can bring Sephardi voters with him on the land-for-peace issue it will add enormously to Mr Rabin's ability to sell the deal to his public. Shas's appeal is not only to the religious. Among the 200,000 who voted for the party in the last election - giving Shas six seats - many were not strictly observant, and Rabbi Yosef's spiritual influence goes beyond Shas voters.
It is often said that Sephardi Jews are more anti-Arab than Ashkenazim. For 15 years they learnt to mouthe the hardline policies of the Likud, which they supported en masse in 1977. However, the views of Sephardim on the Arab question are highly complex. Those Jews whose families recently left countries where they were dominated by Arabs clearly harbour deep resentment - resentment which the Likud exploited. But, by the same token, many maintain a lasting cultural affinity with Arabs, are less fearful of them than European Jews and often maintain a deep affection for the lands they left behind. Moroccan Jews, for example, still revere King Hassan.
Mr Rabin clearly understands that such equivocal sentiments are open to suggestion - from Rabbi Yosef. He has been desperate to keep Shas in his coalition during recent party ructions and has paid late-night visits to the rabbi's home when Shas looked ready to walk out. 'With Shas on board, Rabin has a religious stamp of approval for his peace treaty. Without them he would face a phalanx of rabbis telling him it is heresy,' said David Landau, author of a new book on the ultra-orthodox, Piety and Power.
Whether Shas can hold on to power, however, remains in question. The party's most senior politican, Aryeh Deri, a government minister, is facing a corruption inquiry which could damage Shas. More dangerous, however, is an increasingly vicious anti-Shas campaign by the Ashkenazi ultra-orthodox parties, led by the irascible 95-year-old sage Rabbi Eli ezar Shach, who last week attacked Rabbi Yosef for staying in the secular coalition and polluting Torah values.
It is increasingly clear that the Ashkenazim are not motivated in their attacks by any quibbles over the finer points of Jewish law. For example, most ultra-orthodox rabbis are little interested in what happens to the secular state of Israel, which they do not recognise, believing that only when the Messiah comes will Israel's borders be drawn. (Even Rabbi Yosef said that the territories which could be returned would be given back when the Messiah comes.)
Rather, the anti-Shas lobby is motivated by jealousy at the growing power of Shas, and, particularly, by its exclusive access to government money which allowed it to build up its social institutions and schools - further spreading its influence. Rabbi Shach is particularly angry. He claims to have nurtured Shas in its early years, only to see his creation betray him. 'For the Ashkenazim, Shas's behaviour is like Henry VIII breaking from the Vatican,' said Na rhum Barnea, an Israeli columnist.
The values of the synagogue do not extend to ultra-orthodox politicking, and some fear Rabbi Yosef is not street-wise enough to counter mud-slinging. However, others believe that he will give as good as he gets from now on and maintain Shas's position in government. For Rabbi Yosef and his Sephardi followers, withstanding Ashkenazi attacks has now become a point of honour. The rabbi himself harbours deep personal resentment about his own past exclusion from the Ashkenazi elite of scholarship and about the failure of the East Europeans to pay tribute to Sephardi 'Torah greats'.
The battle lines are therefore drawn in the ultra-orthodox streets. Posters have been going up calling on 'Sephardi zealots' to fight Ashkenazi 'slander'. Menachem Fried man, an expert on religious parties, commented: 'Rabbi Yosef has been humiliated once too often by the Ashkenazim to back down now.'