IMAGE: Tzipi Livni on front page of newspaper
Dan Balilty  /  AP
A copy of the newspaper Maariv shows Prime Minister-designate Tzipi Livni at a cafe in Jerusalem on Sunday. Livni on Sunday abandoned her efforts to form a new coalition government and said she would recommend early parliamentary elections. The Hebrew text on the newspaper reads, "Elections."
updated 10/26/2008 10:00:30 AM ET 2008-10-26T14:00:30

Israeli Prime Minister-designate Tzipi Livni said Sunday that she had given up her attempts to form a new government.

Livni told the Israeli Cabinet on Sunday that her potential coalition partners have made unrealistic demands, her office said.

There "is a limit" to how much she can give in to these demands and she will recommend to President Shimon Peres to call new elections, she said.

Livni has been trying to put together a coalition government since she took over as head of the ruling Kadima Party last month. But partners in the current coalition used the changing of the guard to press new demands.

Clear way for hawks?
The decision will put already fragile peace talks in limbo. And it could clear the way for hawkish opposition leader Benjamin Netanyahu to reclaim the premiership. Netanyahu rejects sweeping territorial concessions to the Palestinians, a necessary component of any peace deal.

Livni has been trying to cobble together a government since she took over as head of the ruling Kadima Party from Prime Minister Ehud Olmert in September. But partners in the current coalition pressed new demands she rejected.

Prime Minister-designate Tzipi Livni had given up efforts to form a coalition and would recommend early elections, Israeli radio stations reported Saturday night.

Israel Radio and Army Radio both said that after consulting with her advisers during the evening, Livni decided not to continue efforts to form a governing coalition and to tell President Shimon Peres on Sunday that she would call for a general election, most probably in February, more than a year ahead of schedule.

Earlier in the evening Cabinet minister Tzahi Hanegbi, Livni's point man on the coalition talks, said in a television interview that Livni would make her decision known formally to Peres on Sunday.

"Tomorrow afternoon she will go to the president," he said. At the time of that interview, Hanegbi said Livni was still undecided.

Ultimatum
Livni on Thursday announced an ultimatum, giving potential partners three days to join a new government under her leadership or face the prospect of going to the polls.

Her Kadima party already had the backing of the center-left Labor party and was expected to keep the small Pensioners party in the government but needed to get the ultra-Orthodox Shas party on board to secure a solid majority in the 120-seat parliament.

On Friday, however, Shas said it would not join Livni as she had refused to pledge that the future status of Jerusalem would not be on the agenda in negotiations with the Palestinians.

Sovereignty over Arab parts of Jerusalem, where around 270,000 Palestinians live, is a key Palestinian demand without which a peace treaty would be impossible.

The renewal of Israeli-Palestinian peace talks at a U.S.-hosted conference last November was supposed to have produced a final deal by the end of 2008, but there has been no agreement and both sides have acknowledged that the target is unreachable.

Palestinian negotiator Saeb Erekat said Saturday that a scheduled Monday meeting between outgoing Israeli Prime Minister Ehud Olmert and Palestinian President Mahmoud Abbas had been postponed until further notice. He did not say why.

Israel Radio, citing unnamed Abbas aides, said the postponement was due to internal Israeli political events.

Given the lack of movement toward a peace treaty so far and the lack of any encouraging signs for the near future, Palestinian and Israeli analysts say that an Israeli election, even if it were to put opposition leader Benjamin Netanyahu in power at the head of a hardline rightist government, could ultimately have less impact than the upcoming U.S. presidential vote.

Opinion polls have indicated that Netanyahu's hawkish Likud party would sweep to power in a general election.

Rules of engagement
"Netanyahu is definitely bad news for the peace process — that doesn't exist anyhow — and Livni is a person who was the chief negotiator, and she didn't do anything," said Ghassan Khatib, a former minister in the Palestinian Cabinet.

"The only other alternative is if the American administration will try to engage," Khatib said, "This can make a difference, regardless of the (composition of) the Israeli government."

Israeli political commentator Hanan Crystal agreed. "That is always the case, it's an axiom," he said.

Peres could technically ask another politician to try to form a government before elections are forced. However, as leader of the largest party in parliament, Livni was the only candidate with a realistic chance of doing so.

Kadima chose Livni, 50, a month ago to succeed Olmert, who is leaving office to battle corruption charges.

An election victory would make the former lawyer and one-time agent in the Mossad spy agency Israel's second female prime minister after Golda Meir, who served from 1969-1974.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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