JERUSALEM — The rift in Israel's fragile coalition government has been sharply deepened by U.S. Secretary of State George P. Shultz's insistence that the Jewish state must surrender territory to achieve a Middle East peace, Cabinet sources said Sunday.
Prime Minister Yitzhak Shamir has already dismissed Shultz's thinking as "theoretical," an aide said, predicting that the American official won't raise the matter, "certainly not as a demand," when he arrives here later this month for talks on the peace process.
However, aides to Foreign Minister Shimon Peres, Shamir's chief political rival and a backer of the latest American peace initiative, said that Shultz will press the prime minister and label him "an obstacle to peace" if he turns down what the secretary of state has called an "essential" part of any settlement.
Peres "is more than sure Shultz will be very tough" when he arrives, a Foreign Ministry source said. Peres heads the centrist Labor Alignment, a partner in the coalition government, and has alternated with Shamir, leader of the rightist Likud Bloc, as prime minister and foreign minister since the last elections in 1984.
"That is wishful thinking on their part," Avi Pozner, Shamir's spokesman, said Sunday on the subject of Shultz's being "tough."
"Shultz is a realist," Pozner said. "In the same speech (when Shultz declared territory for peace was essential), he also said that any peace agreement can work only if both sides (of the Israeli political equation) are in line."
What the American official said in a closed-door speech over the weekend is that "what we intend to do cannot be done on the basis of 51% against 49%, and we must work with both (Israeli) parties." But he stated unequivocally that the basis for any Arab-Israeli settlement must be "territory in exchange for peace."
"The Likud standpoint is known," Labor Minister Moshe Katsav, a Shamir ally, said Sunday. "We are opposed to every attempt to exchange territories for peace. We do not believe this is a practical solution."
According to Pozner, the entire question of territory is "artificial." He said: "It is part of a discussion of a permanent settlement. But there is no need to talk about an exchange" since Shamir's strategy is to first reach an interim agreement ending the uprising before even considering a permanent settlement.
"Therefore," Pozner added, "we are not at a stage to even discuss something as illusive as a permanent settlement."
No Fallback Stance
Since Shultz also has indicated that he has no fallback position if the proposal is rejected, he seems to have put himself clearly on Peres' side in what has become an extraordinarily nasty dispute between the coalition leaders.
The results of this dispute, beyond having the potential of scuttling Shultz's hope of igniting a peace process that could quickly end the current rebellion in the Israeli-occupied West Bank and Gaza Strip, could further undermine the shaky coalition, according to published reports here.
Haaretz, a leading Israeli newspaper, reported Sunday that sources on both sides of the Cabinet fight foresee either a withdrawal by Peres from the government, which would bring about its collapse, or a call by Shamir for early elections, which otherwise will be held in November.
And the Jerusalem Post, which has close contacts within the Foreign Ministry, quoted aides to Peres as saying that Shamir and Shultz "are set on a clear collision course," which could widen the crack in the government.
Pozner said, however, "there will be no early elections and Peres will not withdraw." He and other Shamir supporters claimed that Peres' stance on the peace process and threats to quit the government are little more than political tricks aimed at embarrassing the prime minister for cheap electoral gains.
At any rate, the tactics of both sides could hardly be rougher.
After Peres said last week that negotiations are needed to end the nine-week uprising on the West Bank and Gaza Strip, Shamir responded publicly that such proposals "were irresponsible . . . telling the Arabs that they should increase their pressure, intensify the disturbances and unrest . . . in order to achieve more concessions. . . ."
"His address is a confirmation of the message (that) the Jews are surrendering."
Stab in the Back
The prime minister then accused the foreign minister of stabbing him in the back and working to destroy the coalition. "I am in favor of national unity. . . . But how can you do this when Peres stands up and says that he has already conceded everything. . . .
"How can you conduct negotiations together when your partner runs to the other negotiating party, the other side, every day, every moment, and says: 'I'm selling for less. Don't listen to what Shamir says.' "
Despite the near-hysterical tone of the political debate in Israel and even the projections of serious newspapers and political experts, there are reasons to doubt any disintegration of the government.
First, even if the Labor Alignment pulled out, it remains possible for Shamir's Likud Bloc to form a government with religious parties and parties of the far right, although it would mean concessions on domestic issues that the prime minister does not want to make.
But a more important element in holding Peres in the government are trends in public opinion polls showing that Likud has the momentum at the moment.
"Peres' only hope is not to pull out and force early elections," said one former Labor Alignment member of the Knesset (Parliament) whose status in a government agency prevents him letting his name be used, "but to hope that Shamir's fight with Shultz will hurt him with the public by next November."