Netanyahu returns to office with swipe at US peace plan

Binyamin Netanyahu, the hardline former prime minister who has criticised Ariel Sharon for being too soft on the Palestinians, returned to political office yesterday as Foreign Minister after three years on the outside. He will serve in a caretaker government until elections that are now expected to be held in January.

One of Mr Netanyahu's first moves in office was to tell Israeli army radio the latest American peace plan was "not on the agenda" because, he said, of the likelihood of a US attack on Iraq. That is a sign of the problems ahead for the peace process, as Mr Sharon and Mr Netanyahu jockey for position ahead of the elections.

The election date being spoken about yesterday was 28 January, which suggests the poll could coincide with an attack on Saddam Hussein. Officials have said the vote could be delayed in the event of war.

Two Israeli settlers were killed by a gunman in the Gaza Strip yesterday – a reminder that the elections come in the midst of the Intifada. Hamas claimed responsibility for the attack. The gunman was shot dead by a security guard.

Mr Sharon and Mr Netanyahu may be working together for now, but within weeks they will face each other in elections for the leadership of the Likud party which, if opinion polls are right, will almost certainly decide who will be the next Prime Minister.

According to one poll published yesterday by Yedioth Ahronoth newspaper, Likud stands to win 33 seats in the Knesset compared with 19 seats for its nearest rival, the Labour Party.

What is not so clear is who will lead Likud to the polls. Either way, it is bad news for the Palestinians and the peace process. The process is already all but dead and much of the Oslo peace accords have been in effect overturned by the Israeli reoccupation of West Bank cities.

Meanwhile Mr Netanyahu has been criticising Mr Sharon for not being tough enough towards the Palestinians. Before Mr Sharon went for early elections, Mr Netanyahu was said to be demanding Yasser Arafat's expulsion as a condition for joining a new coalition government.

Mr Netanyahu's detractors say he is all talk, and point out that when he was Prime Minister he was not so tough as he now claims to be.

The date for the Likud leadership election has not been set yet, but Mr Sharon is thought likely to prefer to hold it this month. According to yesterday's Yedioth Ahronoth poll, Mr Sharon is likely to win, with 44 per cent support from Likud members, to Mr Netanyahu's 38 per cent.

A leadership challenge is also looming in the Labour Party. Binyamin Ben-Eliezer, the party leader who shifted Labour to the right when he served as Defence Minister in Mr Sharon's government is trailing in the polls behind Amram Mitzna, the Mayor of Haifa, who is seen as more positive to the peace process.