Olmert faces right-wing rebellion

Ehud Olmert's governing Israeli coalition was facing a period of turbulence as it opened formal negotiations yesterday with the Palestinian leadership on the "core issues" at the heart of the Middle East conflict.

With Avigdor Lieberman, leader of the most right-wing party in Mr Olmert's government already threatening to walk out, Benjamin Netanyahu, leader of the opposition Likud, urged both him and the religious party Shas to do so "to stop this process".

The Israeli Foreign minister Tzipi Livni and the veteran Palestinian negotiator Ahmed Qureia met in a hotel here to begin a year of talks on issues defined at the weekend by the Palestinian President Mahmoud Abbas as the future of Jerusalem, Palestinian refugees, borders, West Bank settlements, security and water resources.

The idea is to reach a so-called "shelf agreement" on a future Palestinian state which the Prime Minister, Mr Olmert, has assured his cabinet will not be implemented until fulfilment of the road map's requirements for Mr Abbas to act against armed Palestinian groups "both in Gaza and the West Bank".

This key proviso did not, however, stop the rumblings from Mr Lieberman, who will meet Mr Olmert today and announce tomorrow, after a meeting with his party, whether he intends to resign. Mr Lieberman yesterday called the beginning of the negotiations a "casus belli". He added that other moves – including Mr Olmert's depiction on Sunday of Jewish settlement outposts illegal even under Israeli law as a "disgrace" – were "not good" for his party, Yisrael Beiteinu.

Mr Netanyahu stepped up the right-wing pressure on Mr Lieberman yesterday by claiming that the opening of negotiations was a "strategic" concession "crucial to the future of Israel" because the "cessation of terror has been dropped as a preliminary requirement for entering negotiations". This would be followed by "relinquishing half of Jerusalem", he claimed, and withdrawal to 1967 borders, "leaving them indefensible".

If only Mr Lieberman's party left, it would still leave Mr Olmert with a narrow Knesset majority and he is reportedly courting another religious party, United Torah Judaism, as a possible alternative. But it would be a blow which would intensify the pressure on Shas to leave as well. Mr Olmert is already facing government instability over the second Winograd report on the failings of the 2006 Lebanon war.

Meanwhile, President George Bush was expected to use his first visit to Saudi Arabia to try to persuade it to increase political support for Mr Abbas's emergency administration in the West Bank and the negotiating process he has embarked upon with Israel. The Saudis have been reluctant to give the full support Israel and the US have been seeking for a process and authority which totally excludes Hamas.

As widely predicted, Mr Bush, who was met on arrival by King Abdullah bin Abdul Aziz al Saud, yesterday notified Congress of his planned $20bn (£10bn) sale to Saudi Arabia of weapons, including precision-guided bombs. Iran was another key topic of the talks.