Amir Peretz: New Labour

Two moments at the Labour Party's Tel Aviv headquarters on Thursday, one highly publicised and one not publicised at all, help to sum up the volatile new dynamic in the politics of Israel - and perhaps of the Middle East - unleashed by Amir Peretz's assumption of the leadership a fortnight earlier.

Yesterday's Israeli newspapers all carry pictures of Peretz with his arm draped round the tall figure of Avishay Braverman, the president of the University of the Negev, who had just announced he was joining Labour. Nothing could better illustrate the seriousness of Peretz's campaign - or the falsity of the persistent gibes about him being an obsolete 1940s socialist - than the recruitment of Braverman, an economic liberal and global networker who turned a sleepy college in southern Israel into a world-class university. For Braverman, arguably the most sought-after man in Israeli politics, had been widely touted as a likely new face in the breakaway centrist party Ariel Sharon launched on Monday. For the new Labour leader this was a coup indeed.

The second came when Tom Wegner, a member of Peretz's team, stepped out of his office for a breath of fresh air at around 2pm. Yesterday was the last day before the election that it was possible to join the party, and Wegner noticed, as he surveyed the queues waiting to sign up, a remarkable sight. Among them a devout Israeli Arab Muslim was praying on the mat he had brought for the purpose. Not far away was a group of ultra-Orthodox Jews, rocking back and forth as they conducted their own devotions.

Yet the remarkable 25,000 people who have joined the party in the past 10 days - including Braverman and his religious new fellow recruits attracted by a notably secular leader - are only one sign of the excitement generated by Peretz's leadership. Describing the mood at the meeting of Labour's central committee when he was elected, Wegner says: "This place had begun to feel like a senior citizens' home; that was more like a rock concert." Another are the polls showing a rapid improvement in Labour's electoral standing.

It's likely that Ariel Sharon's decision to form a new party was partly triggered by the Peretz threat. It's certain that Peretz is the reason that Silvan Shalom and Shaul Mofaz, the two rivals trying to beat Benjamin Netanyahu for the Likud leadership, have been proclaiming not only their origins as Jews from Muslim countries - if Peretz wins the union leader will be the first such Israeli to lead his country - but also some freshly discovered egalitarian credentials to match the passion for social justice which runs so thoroughly through the Peretz bloodstream.

He is, of course, a definable brand, instantly familiar from the television screens even before he became leader, thanks to the famous and endlessly debated moustache, now reduced from its once luxuriant handlebar splendour. While admitting that one of the larger versions upset some of the million voters from the former Soviet Union because "they thought it made him look like Stalin", Yuli Tamir, the former minister who ran his party leadership campaign, suggests another factor behind its trimming.

"The official reason is that he was involved in a strike with deaf workers who complained that they couldn't lip read what he was saying," she says. "His wife has another explanation." Ms Tamir recounts how astonished she was, walking a fortnight ago with Peretz through traditionally right-wing Jerusalem, at the warmth of the shouted greetings from passers-by.

But in reality it is impossible to separate the deep appeal of the man who has transformed Israeli politics in a fortnight from his roots. Ms Tamir describes the 54-year-old Peretz as "probably the last chance for Labour to break out of its closed circle" - and transform an ageing, middle and upper middle class Ashkenazy base into one that brings in the low-income immigrant groups, including Eastern Jews who make up half the electorate and have tended to support Likud.

Born in the Morocco town of Bougade, Peretz came to Israel with his parents at the age of four; they arrived at a transit camp in the Negev which later became Sderot, the archetypal, and much neglected, "development town" close to the Gaza border where he has lived ever since. His father, a leader of the Jewish community in Morocco, worked at a kibbutz factory; his mother was a homeworker. Seeing the deprivation he wrote, by his own account, his first "social protest" leaflet while still at school.

During his military service in 1974, having swiftly passed his officer's course and serving in the parachute brigade, he was on an exercise in the southern Sinai when he jumped down to free his armoured personnel carrier after it stuck in the sand. The jack slipped and the vehicle's caterpillar tracks savagely crushed his leg.

He was in hospital for two years, during which he defied medical predictions by learning - albeit painfully slowly - to walk again. Daniel Levy, a member of the left-wing Meretz party who has nevertheless helped on the Peretz team, says it is a strength rather than a weakness that he is a "civilian politician", as sometimes it is claimed that only generals should become Labour prime ministers.

Once out of hospital he bought what became a successful farm and married his wife Ahlama. They have four children. Ahlama Peretz, an attractive and articulate woman who is deputy director of a college in the Negev and is likely to be seen a lot in the election campaign, has been active in a joint workshop with Bedouin Arabs promoting co-existence. The main vestige of Peretz's farming days is that he now unwinds by gardening for pleasure - and his specialities are still the roses and garlic he grew as a full-time farmer.

It was in the Eighties, as mayor of Sderot, that he began to declare openly - in terms that were far from politically safe at the time - his belief in a Palestinian state. He organised a huge rally of the left "Negev sings for peace" which called for the immediate withdrawal from Gaza - two decades before it happened. And he campaigned tirelessly against settlement building in the occupied territories.

"He saw the settlements as a block to any peace with the Palestinians," says Janet Avian, the veteran founder member of Peace Now, "and he wanted the billions of shekels spent on them to go to the development towns in Israel instead." Ms Avian says Peretz was - and still is - a "bridge" between the Israeli working class and a leftist peace movement seen as elitist and European in outlook. "I climbed many hills with him protesting against the settlements which was difficult for him physically because of his injury and difficult politically because it probably cost him votes."

He became a Knesset member in 1988, and became leader of Histradrut which he had helped to reform wholesale, in 1995. Like Bob Hawke of Australia and the current Brazilian president Lula he could join that elite group of government heads who partly made their name leading strikes. But he was also imaginative as Histradrut chairman, promoting the transformation of sweatshops into often flourishing worker co-operatives. Not surprisingly his programme includes a big raise in the minimum wage. But his appeal is essentially social democratic. "This isn't Marx vs Milton Friedman," she says. "It's more Democrat vs Republican."

In a ringing declaration at a memorial rally for Yitzhak Rabin, Peretz said he wanted to see the time when the Jewish children of Sderot and the Palestinian children from the Gaza district of Beit Hanoun - from which Qassam rockets have frequently been fired at his home town - played together. But his allies insist that social justice within Israel - for Israeli Arabs as well as for the down-trodden Jewish groups - will play a much bigger part in the election campaign than his stated desire for early and far-reaching negotiations with the Palestinians.

That may be true. But one of Peretz's strengths is that the two are really inseparable - something that still stands a chance of connecting the Israeli working class with an aspiration for a just peace deal with the Palestinians, almost for the first time. Ever since the Eighties he has argued that the huge financial costs, as well as what he unashamedly calls the "moral costs" of the occupation, are met at the expense of services for all Israelis, Jewish and Arab, well-off as well as - mainly - the poor.

He can't - so far - be accused of tailoring his message to different groups. He told the Israeli Arab newspaper Kul al Arab recently that he wanted early negotiations with the Palestinians directed at an eventual deal on "final status", and that he wanted more Arab Knesset members than ever before. Much less palatably to Palestinians, he said he still believed in a united Jerusalem under Israeli control as well as for Palestinian refugees only to return to the Palestinian state. On the other hand, no Israeli politician has ever said before being elected that he wanted to divide Jerusalem - including Ehud Barak who began to do just that at Camp David in 2000.

The big question is whether and how he can get to power. With polls at present - four unpredictable months before election day - showing Sharon as leading the biggest party, but with a much more successful Labour Party running second, would he form the coalition Sharon would need?

Oddly the two men have a warm personal relationship since Peretz cycled out to the nearby Sharon ranch from Sderot on Saturdays. "They have the same sense of humour," says Wegner, as well as the same love of growing things. Peretz himself said before the Likud split that, unlike Peres, he is against "unity governments". But Tom Wegner explains: "What he was saying was that in a democracy there should be an opposition." If there are three main parties, he points out, then an opposition is still guaranteed even if two form a coalition. Wegner adds that it is much too early to talk coalitions and that his man will win.

He just might. After years as a spent force, Labour suddenly has some real momentum behind it. The possibility that Peretz could become the left's version of Menachem Begin and overturn a fossilised and partly corrupt political establishment, as Begin did to Labour in 1977, can't be ruled out. He has a visceral political intuition and 17 years of experience in the wheeling-dealing of the Knesset. But more than that, says Wegner, he has "the killer instinct, which you need to be elected as prime minister". He adds: "He has a lot of hunger to create an alternative in this country, a lot of energy. We haven't seen this kind of energy in Israeli politics since Rabin."

A Life in Brief

BORN 9 March 1952 in Bougade, Morocco.

FAMILY Married to Ahlama. They have four children.

EDUCATION High school in Sderot where the family settled after emigrating to Israel in 1958.

CAREER Served as an officer in Israeli Defence Forces, wounded in the Yom Kippur war and spent two years in hospital. Bought a farm and grew vegetables for export. Elected mayor of Sderot in 1983 for the Labour Party and won a seat in the Knesset in 1988. Headed Histadrut, the trade union movement, from 1995. Resigned from Labour to form Am Ehad in 1999. The party merged with Labour in 2004 and Peretz defeated Shimon Peres in a leadership contest in November 2005, vowing to end Labour's coalition with Likud.

HE SAYS "I see the occupation as an immoral act."

THEY SAY "Now there is (in Israel) a clear leftist party, anti-economy, anti-reform, headed by a social demagogue." Tommy Lapid, leader of Shinui