Kadima is likely to lead the opposition against a Likud dominated government, according to recent reports. The main sticking point in coalition building discussions focused on Palestinian statehood, with Kadima Chairman Tzipi Livni mandating a two state solution and Likud Chairman Binyamin Netanyahu insisting limited sovereignty in the territories. Some analysts are at odds over the “ripe” theory of Israel-Palestine peace, declaring the need for different short term goals that may increase the likelihood of peace in the long term. Meanwhile, Shas’ demands to join the government include doubling benefits for families with children, a major issue for religious parties in Israel due to the high birth rate.
Reconciliation talks between the Palestinian Authority and Hamas began today in Cairo. Ahmed Qurei, head of the Fatah Delegation, described initial meetings as “encouraging.” Cairo is also gearing up for a meeting next week to support Gaza reconstruction efforts.
With Netanyahu preparing to assume the role of Prime Minister, his office drafted a proposal for repeated tax cuts, mimicking Bush Administration policies. This strategy will closely resemble Netanyahu’s economic policies during his first term as head of the government in the late 1990s. The Shekel-Dollar rate dropped to 4.2 NIS to the dollar, the highest rate since August 2007. This past summer, economic troubles in the United States and a strong Israeli economy created a rate of 3.2 NIS to the dollar.
