A coalition crisis came to a head at the weekend after a long and bitter dispute between two radically opposing parties - the religious party, Shas, and the secular left-wing party, Meretz - which formed an uncomfortable alliance within Mr Rabin's majority Labour government after the June election.
On Sunday, the Shas interior minister, Aryeh Deri, resigned. Resignations only take effect after 48 hours, before which much hard bargaining is usual to reverse the decision. The nature of Israel's coalition politics is such that no single party has ever been able to hold a majority alone. Mr Rabin has until today to find a way to bring Shas back.
Behind the crisis lies a tangled history of personal bickering, coalition power-mongering and ideological clashes, centring on Mr Deri, whose party has wide support among Sephardi (Middle Eastern) Jews, and Shulamit Aloni, of Meretz, who is a feminist, human rights campaigner, and advocates separating religion and state.
After months of threats to walk out, Mr Deri, who is under police investigation on fraud charges relating to his membership of the previous Likud government, resigned in protest at Mr Rabin's refusal to move Mrs Aloni from her education post.
The Shas walk-out, if not reversed, will force Mr Rabin to rely on Israeli-Arab members of parliament to push through his programmes. With the Arab Knesset members, who have a loose agreement to support Mr Rabin but are not formally in the coalition, he can achieve 61 votes in the 120-member Knesset. Mr Rabin has always said he does not want to rely on them; he prefers a wide coalition, to ensure broad support when consensus is sought for moves in the peace process.
Amid high drama in Jerusalem, Mr Rabin and his key advisers are frantically looking for ways of answering the objections of Shas without, at the same time, placing Meretz in a position in which it would then be forced to walk out.
Political commentators suggest that the timing of the row - the most serious since Labour came to power - is linked to the peace process. Meretz is Israel's only Zionist political party that advocates the eventual creation of a Palestinian state. Shas, although not the most hardline of the religious parties, nevertheless has a strong constituency among right-wing religious groups that oppose territorial concessions.
Jewish settlers living in the occupied territories have recently focused their attacks on Mr Rabin's peace moves by pressing Shas to pull out of the coalition.
WASHINGTON - Israel has authorised the return to the occupied territories of 25 Palestinians deported to southern Lebanon in December, Yossi Gal, the spokesman for the Israeli delegation to bilateral peace talks here said yesterday, AFP reports.
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