Israeli leaders avoid all-out split. But differences over Mideast peace conference still rankle

Israel's shaky coalition government has survived its latest crisis intact but is deeply divided on how to promote the Middle East peace process. And, until the profound differences are resolved or the coalition breaks up, the government will apparently continue to speak in two voices - with one policy line emanating from the prime minister's office and the other from the Foreign Ministry.

The controversy centers on the issue of an international peace conference to begin Arab-Israeli negotiations. Foreign Minister Shimon Peres returned Friday from Cairo with an Israeli-Egyptian pledge to push for an international conference this year which would lead to direct Arab-Israeli talks. The declaration appeared to challenge Prime Minister Yitzhak Shamir, who opposes such a conference on grounds that outside participants would force Israel to make vital concessions.

Peres's move threatened to cause a major split in the Cabinet, with Labor Party ministers lining up behind him and the Likud half backing Shamir's demand that negotiations be held only through direct Arab-Israeli talks.

However, Peres seems to be working to defuse the crisis. He said the international conference would only be a prelude to direct talks and not replace substantive direct Arab-Israeli negotiations. Sunday's Cabinet meeting was stormy, but Peres left the door open for compromise by saying that no Cabinet decision was needed until negotiations on convening the conference had reached an operational stage.

Both parties, a Likud minister said, appeared committed to serving in the government despite the profound differences between them.

The reason Shamir and Peres avoided an all-out split, observers here say, is because neither has an interest in breaking up the government at this time. Neither of their parties would be assured a majority if new elections were held now, and the international conference is not an imminent development requiring a difficult Cabinet decision.

Peres, observers say, prefers to continue pushing for the conference by pursuing his interpretation of the government's guidelines without risking a negative Cabinet vote on the issue. Shamir also prefers to avoid a ``no'' vote, because it could lead to Labor's departure from the coalition and a new election would cut short his term as premier and expose him to challenges within his own party.