Arafat names Cabinet as Israeli govt creaks

The old Cabinet quit in September to avoid a no-confidence vote by the Parliament, which has stepped up criticism of Arafat’s government during the two-year-old Palestinian uprising. Arafat unveiled his new government in a speech, to the Palestinian Parliament, that was at times defiant and conciliatory toward Israel after two years of bloodshed.

His speech coincided with a political fight in Israel that has brought Sharon’s broad-based coalition close to collapse in a row over government funding for Jewish settlements in the West Bank and Gaza Strip.

‘‘They reoccupied our land and cities but failed to occupy our awareness, our determination, or to break our will or our souls,’’ Arafat said.

Arafat also repeated his condemnation of ‘‘all terrorist acts that harm civilians’’ and said the Palestinians had chosen peace as their ‘‘strategic option’’. ‘‘So here we extend our hand to you in reconciliation and we extend the olive branch to resume the path that we began in Madrid and Oslo,’’ Arafat said, referring to venues for peace talks that led to a historic interim accord with Israel in 1993.

Even as Arafat spoke, his long time foe Sharon remained caught in his worst coalition crisis since coming to power 19 months ago. A senior official in Israeli Prime Minister Ariel Sharon’s Likud Party said on Tuesday there would be no choice but to call early elections within 90 days if his main coalition partner, the Labour Party, voted against the 2003 budget on Wednesday.

The Labour Party, headed by Defence Minister Binyamin Ben-Eliezer, has demanded some funds earmarked for settlements be diverted to the poor and elderly. Sharon, a champion of settlement building, has threatened to kick Labour out of the government if it opposes the budget.

That would shatter Sharon’s ‘‘national unity’’ coalition and leave him at the head of a minority government six votes shy of the number needed to pass legislation on its own. (Reuters)