JERUSALEM, Oct 25 (Reuters) The head of Israel's left-leaning Labour Party agreed today to recommend it remain in Prime Minister Ehud Olmert's government after a far-right partner joins, an official statement said.
The decision, announced by Olmert's office after he met the Labour leader, Defence Minister Amir Peretz, could be key to the success of the prime minister's bid to shore up a governing coalition under fire over its handling of the Lebanon war.
Peretz faced calls within Labour to bolt the government after Olmert signed up Avigdor Lieberman and his far-right Yisrael Beitenu party this week.
Lieberman, who lives on a Jewish settlement in the occupied West Bank, has stoked controversy by advocating annexation of parts of the territory and transfer of several Arab towns in Israel to a future Palestinian state, policies Labour opposes.
But Olmert's office said in a statement that Peretz ''announced at the end of the meeting he would recommend to the Labour Party that it approve its continued participation in the government''.
Peretz himself made no remarks to reporters.
Political analysts forecast that Labour's Central Committee would agree to Peretz's request in a vote likely on Sunday. Opinion polls have shown Labour, along with Olmert's centrist Kadima party, would fare poorly if elections were held now.
With Yisrael Beitenu on board, the number of coalition seats in the 120-member parliament would rise from 67 to 78. Labour's defection would leave Olmert in control of only 59 seats and force him into an immediate fight for political survival.
Olmert's cabinet and the parliament need to approve Yisrael Beitenu's coalition membership before it becomes final. But with Labour's support, he is certain to win ratification.
If all goes smoothly for the prime minister, Lieberman would be sworn in as a deputy prime minister, with special responsibility for strategic policy, early next week.
STRATEGIC PLANNING That could put the ex-night club bouncer, an immigrant from the Soviet Union, at the forefront of planning -- which Olmert says is under way -- for a potential nuclear threat from Iran, whose president has called for Israel's destruction.
Olmert has said a nuclear-armed Iran would pose an existential threat to the Jewish state. Iran has said it is enriching uranium for electricity generation.
In it statement, Olmert's office said the prime minister promised Peretz that his authority as defence minister would not be impinged and there would be no change in the government's guidelines.
Nonetheless, Yisrael Beitenu's participation in the government would likely ensure that Olmert's plan to dismantle dozens of Jewish settlements in the West Bank, while strengthening others, remains on the shelf.
After the 34-day Lebanon war ended in August, Olmert announced that the ''realignment'' plan on which his centrist Kadima party won election in March was no longer a pressing issue for the government.
Hezbollah's launching of nearly 4,000 rockets at northern Israel from territory Israeli forces quit in 2000 raised fears among many Israelis that West Bank pullbacks would leave the centre of the Jewish state vulnerable to Palestinian attack.
Reuters BDP DB1957