HA’ARETZ 1. SHARON TRYING TO CHANGE COMPOSITION OF COALITION AFTER DEFEAT IN KNESSET VOTE. PM’s political-economic statement rejected 53-44. Sharon to resume negotiations with Labor and religious, Mofaz to meet with Rabbi Yosef. Sharon: Disengagement will be submitted for Knesset approval on 25.10.04. 2. IDF ALLOCATES TO PALESTINIANS: ONLY THREE DAYS PER ANNUM TO HARVEST OLIVES. 3. MK HENDEL PROPOSES: COMMUNITIES FOR JEWS ONLY. 4. JERUSALEM CHRISTIANS FED UP WITH JEWS SPITTING ON THEM. 5. ISRAEL’S STRATEGIC SITUATION IMPROVING. However, Jaffe Center for Strategic Studies determines that Israel missed opportunity to resume negotiations with Syria. 6. “BANKS DELAYING RETURN OF HOLOCAUST VICTIMS’S FUNDS. Parliamentary Committee of Inquiry on Location and Restoration of Victims’ Assets Chairwoman MK Colette Avital accuses banks – especially Bank Leumi heads – of delaying publication of report on Holocaust victims’ accounts in Israeli banks. HATZOFEH 1.PM’s confidants: He intends to broaden coalition. LIKUD REBELLION: DEFEAT FOR SHARON. PM delivered political statement – including disengagement timetable – at opening of Knesset winter session. Proposal defeated 53-44. Sharon opponents within Likud faction: “Despite campaign of threats from Sharon’s Bureau, MKs were not panicked and voted against.” Assessment: Beginning of the end for Sharon. 2. BROTHER OF PERSON WOUNDED IN TABA OUTRAGED AT EGYPTIAN DIPLOMAT: “WE DON’ T NEED YOUR FLOWERS.” 3. JAFFE CENTER: ISRAEL HAS STRATEGIC SUPREMACY IN MIDDLE EAST. MA’ARIV 1. Sharon: Must replace this coalition. STINGING DEFEAT. PM opened Knesset winter session on left foot. Likud rebels abstained and Sharon’s attempt to secure approval for his political statement failed. Sharon will now try to bring Labor and haredim into government in order to survive. 2. CASE OF PALESTINIAN GIRL: REGIMENTAL CO’S VERSION. “Veteran soldiers out to take revenge on me.” YEDIOT AHRONOT 1. PM resumes unity contacts after Knesset rebuke. DEFEAT FOR SHARON. Likud rebels, extreme right, Labor and NRP banded together last night and handed crushing failure to PM in vote on his speech. Assessment: If coalition cannot be broadened – no alternative to elections. 2. Expose: SEVEN IRANIANS ARRESTED IN ASIA WITH ISRAELI PASSPORTS. 600 Israelis reported this year: “I lost my passport.” Police: Many sold them to hostile elements. 3. WOMEN IN ISRAEL EARN 30% LESS; ONLY A FEW REACH MANAGEMENT LEVELS. New report on working women in Israel reveals harsh picture: Equality is far off, discrimination is great. ______________________________

SUMMARY OF EDITORIALS FROM THE HEBREW PRESS Both papers discuss Prime Minister Ariel Sharon’s failure to secure Knesset approval of his statement at the opening of the Knesset winter session yesterday: Hatzofeh says that after yesterday’s defeat and given the tenuous nature of the governing coalition, “It is highly doubtful if the Sharon government will succeed in mobilizing the necessary majority to pass the state budget,” and speculates that there will be either a referendum or early elections. Yediot Ahronot believes that the most significant thing about Prime Minister Sharon’s statement was his call, “for an expanded package deal – a great social charter – between the government, the Histadrut and employers with the goal of jointly formulating and enacting necessary reforms for the Israeli economy.” The editors call on the Histadrut to respond to the Prime Minister’s olive branch and assert that, “It is possible to implement the charter within a relatively short time frame and save the economy from chaos.” The paper avers that, “The reforms cannot be implemented by force; force sows only ruin.” __________ Yediot Ahronot, in its second editorial, faults both the Bank of Israel and the Finance Ministry for failing to implement structural reforms. BPI-info