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Israeli Cabinet unlikely to cut West Bank budgetSkip to next paragraph
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Right-wing parties essential to Prime Minister Yitzhak Shamir's parliamentary majority threatened to pull out of the government if a plan to freeze Jewish settlements in Arab territories is carried out.
Details of the plan - part of an austerity package designed by Finance Minister Yigal Cohen-Orgad - were leaked to radio networks before today's scheduled presentation of the package to the Cabinet.
The ultra-nationalist Tehiya Party, with three deputies in the Knesset, where Mr. Shamir's coalition prevails by one vote, threatened to pull out of the coalition even if only a partial curb on the $420 million settlement budget is imposed. But Israel television reported that Mr. Cohen-Orgad was rapidly losing support within the Cabinet and predicted his plans stood no chance of being adopted.