Israel's New Labor Pain?

By Matt Rees

When union firebrand Amir Peretz snatched the leadership of Israel's Labor Party last week, he sent a shock through the country's political system. Labor, the traditional bastion of the Israeli elite, has been in sharp decline since its last Prime Minister, Ehud Barak, was defeated by Ariel Sharon in 2001. Now Peretz, a Moroccan-born resident of one of Israel's poorest towns, promises to revitalize Labor by shaking things up even more.

As an exhausted Peretz, 53, ran between meetings with Labor lawmakers and his predecessor as party leader, Shimon Peres, he told TIME that he plans to quit Sharon's government immediately and force elections as early as next March. He hopes to draw voters with a social agenda that includes a higher minimum wage and government-subsidized pensions. He hopes the program will attract poorer people who have dismissed Labor as a party for the rich, particularly Arab voters and Jews whose origins, like Peretz's own, lie in the Arab world. Officials in Sharon's Likud Party and others who have built recent electoral success on the discontent of those voters acknowledge Peretz could hurt them. "He observes some of the traditions of the Sabbath, and he's Moroccan," says an official with the Shas Party. "That will attract voters' attention."

In Peretz's 10 years heading the Histadrut, Israel's labor federation, he squeezed successive governments with general strikes and, after a falling out with Barak, formed a breakaway faction in parliament. It was the grass-roots devotion of union activists and the faction's supporters that earned him his surprise win last week. Peretz promises a more conciliatory approach to the Palestinians than Sharon's. Opponents lampooned him during the campaign, saying it was impossible to imagine the roughhewn Peretz meeting with President Bush to discuss the peace process. But Peretz told TIME that he'll cut out the middleman and talk directly to Palestinian President Mahmoud Abbas.