RAMALLAH, West Bank, 17 January 2008 — The Hawkish Israeli Minister of Strategic Affairs, Avigdor Lieberman, announced yesterday he was resigning his office and that his rightist party Yisrael Beiteinu was leaving the coalition over disagreements with Prime Minister Ehud Olmert regarding negotiations with the Palestinians on the core issues of the conflict as Jerusalem, the refugees and the borders of a future Palestinian state.

The move, which was announced in a press conference, came just two weeks before the Winograd Commission, probing the July war on Lebanon, plans to release its final report. According to Israeli analysts, the report is expected to cause a political storm in the Israeli political arena.

Lieberman said that he has given Olmert his letter of resignation, which will come into effect in 48 hours: “We haven’t always seen eye-to-eye but we were always franks with each other,” he said. Lieberman’s position as minister for strategic affairs was tailored specifically for him in exchange for Yisrael Beiteinu joining the collation, as he was made responsible for gathering “strategic intelligence” on Iran.

“We said clearly that if there would be negotiations on the core issues, we wouldn’t be in (the government),” Lieberman told a press conference in Jerusalem yesterday morning. Lieberman said peace talks must address the issue of transferring the Arab-Palestinian population inside Israel to Palestinian control.

“From our point of view, the concept of land for peace is out of the question,” said Lieberman. “The principle must be exchanges of territory and population.” “Our problem is not with the Palestinians, it is with Israeli Arabs,” he said. “(Arab members of Israeli Knesset) Ahmed Tibi and Mohammed Barakeh are more dangerous than (Damascus-based Hamas leader Khaled) Meshaal and (Hezbollah leader Hassan) Nasrallah, because they operate from within.”

In response, Tibi accused Lieberman of being “worse than (Austrian far-rightist) Jorge Hider.” “A government without Lieberman is a government that is less bad,” said Tibi. “He gives racists around the world a bad name.”

Barakeh, for his part, urged Israeli Attorney General Menachem Mazuz to outlaw Yisrael Beiteinu. “Lieberman is not only a threat to peace but also to democracy,” he said. “He is afflicted with a severe case of racist AIDS.”

Olmert said in response to Yisrael Beiteinu’s resignation from the government that “there is no alternative for serious negotiations aimed at reaching peace. This is the present need and the national responsibility need. Lieberman and I disagree, and I am determined to continue the diplomatic negotiations out of the recognition that this is the only chance for guaranteeing real peace.”

After Yisrael Beiteinu’s 11 MKs leave, Olmert’s coalition will number only 67 MKs of 120 MKs and will be propped up on the religious party Shas, which has also threatened to leave the coalition as soon as serious negotiations begin on the fate of Jerusalem.

Israeli negotiation team headed by Israeli Foreign Minister Tzipi Livni, and the Palestinian team led by chief negotiator Ahmed Qorei on Monday started talks on the core issues. Palestinian sources close to the negotiations said that the first round of talks ended without any announced result.

Meanwhile, Meshaal yesterday ruled out freeing an Israeli soldier seized by the Islamist movement more than a year ago, after 19 Palestinians in the Hamas-run Gaza Strip were killed in fighting with Israeli forces. “After the Gaza massacre there will be no exchange for the soldier (Gilad) Shalit,” Meshaal told a news conference in the Syrian capital after the deadliest day of violence in the territory for more than a year.

“This shedding of Palestinian blood will shorten the existence of Israel and will destroy it,” Meshaal said. “No peace with the killers and no security for the criminals.” The son of senior Hamas official Mahmoud Zahar was among those killed in Tuesday’s violence.

Meshaal charged that the eight-day Middle East tour by US President George W. Bush that ended yesterday “gave cover to this massacre.” Shalit, who turned 21 last August, was captured by fighters from Hamas and two allied groups on June 25, 2006, from an army outpost on the Israel-Gaza border.