Mr Peres is not concerned about the Jerusalem Post's influence on domestic public opinion, but rather the effect it may have on opinion abroad. As the only Israeli English-language daily, it is an international opinion-former. The paper has been distributed free at Israeli embassies.
The Jerusalem Post, which used to have a dove-ish editorial line, supporting the Labour Party, moved to the far right under Conrad Black, who bought the Post in 1989 when the Likud party was in power. Mr Black owns the Daily and Sunday Telegraph.
Publicly, the Foreign Ministry insists the cancellation is simply a cost-cutting exercise. However, ministry sources close to Mr Peres say there are strong political motives. Mr Peres is reported to be 'furious' at the editorial line taken by the paper. 'His view is - why should we help the enemy,' according to one official.
Israel is keen to bolster international support for its peace efforts. Mr Peres has encouraged diplomats to improve public relations.
While policy-makers at the ministry have sold the deal as a historic turning point, the Jerusalem Post has attacked it as a sell-out to the 'terrorists'. Three weeks ago, the Post reported that the government was planning to give back all the land seized in the 1967 war to the Palestinians. Yitzhak Rabin, the Prime Minister, insists he will not return Israel to its pre-1967 borders. The story was believed by the Foreign Ministry to have been planted in order to stir up Jewish opposition abroad.
Mr Peres was also said to be furious at the prominence given by the paper to protests against the accord by ultra-Orthodox Jews. The Post opposes the return of any land to the Palestinians and refers to the occupied territories as 'Judea, Samaria and Gaza' - the term used by the Likud.
MPs from Likud have accused the Foreign Ministry of gagging the press. David Bar-Illan, who has been the Post's editor for a year, said he would be 'extremely disappointed' if the decision were a political one, and insisted that his editorial policy was balanced and objective.Reuse content