A Daily Analysis
By Marc Schulman

June 25, 2008 Barak Olmert Reach Agreement

Today was a day of climbing down from trees. Minister of Defense Barak is not calling for the dissolving of the Knesset, while Prime Minister Olmert is not firing the Labor ministers, and Minister of Finance Bar-On is not taking on a huge tax reform.

Last night an agreement was reached between the Labor and Kadima parties under which Kadima agreed to hold primaries no later than September and Barak agreed not to support the bill for the dispersal of the Knesset. The opposition, led by Likud, was livid and accused Barak of being the mop of the government.

In fact, Barak is probably the political winner here. He has forced Olmert to set a date for primaries under the understanding that he will not run. Barak of course did not want elections now any more than Kadima did. Of course, nothing forces Olmert to resign the moment that a new leader is elected in Kadima. My guess is that it will all be academic. I believe he will be indicted before September.

Meanwhile, Bar-On backed away from a comprehensive atax reform package that would have included taxes on workers saving accounts. The Histradrut [workers union] had threatened to begin a massive strike that would include all government offices and agencies, including the Ben-Gurion International Airport.

Hamas publicly announced that it would do nothing to stop the rocket fire by the Islamic Jihad. On the ground, however, Hamas has dispersed troops to try to stop the shooting. It is hard to know what to hope for.