Israel's Shas Party said yesterday that it would not be joining the coalition proposed by the current Foreign Minister and Prime Minister-designate Tzipi Livni. The ultra-Orthodox right-wing party, which is the fourth largest in the Knesset, claims that the coalition has been unwilling to meet its two demands; increasing child allowances and having a no compromise view on Israel's sovereignty over Jerusalem.
Ms. Livni has already sealed talks with the Labour Party and some smaller parties, giving her 48 supporting MKs. But she needs at least 61 to get a majority in the 120-member Knesset, and the coalition must have been formed by November 3rd. So the refusal of Shas, which has 12 MKs, to join, comes as a major blow to her attempts. The New York Times reports that Livni is now entering talks with the left-wing Meretz-Yachad Party and the ultra-Orthodox United Torah Judaism Party, whose admissions would boost the supporter count to 66, easily enough to forge the alliance. 
The leader of Shas, which was a member of the last governing coalition, stated on Friday that the decision of his party's Council of Torah Sages not to join was final, adding that "Shas cannot be bought. We will stick to our goals and principles." Despite this, Otniel Schneller, an MK from the Kadima party, which elected Livni as its leader after the corruption-based end to Ehud Olmert's premiership, said that "I do not see this as the end of the story with Shas. I think we can still find a creative formula for Jerusalem and bring them back."
Livni's negotiation style has come under fire of late, political columnist Nahum Barnea writing that he believes she has involved herself too personally and "has a tendency to impose deadlines when they are not necessary." Indeed her imposition of a deadline for parties to join the coalition, set for tomorrow, was criticised from an official from her own party, who said: "Livni has already been granted a 14-day extension  from Shimon Peres to assemble a coalition, so she may as well have waited a bit with the ultimatum".
If Ms. Livni does fail in preparing the alliance, the decision will be down to President Peres whether to nominate a different Knesset member to try to create a coalition, or to call an election. If one were held, The Los Angeles Times claims, polls show that the main beneficiary would be ex-Prime Minister and Likud leader Benjamin Netanyahu.

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Israeli coalition talks degenerate after Shas departure