Avigdor Lieberman is bringing his party Yisrael Beiteinu (Israel Our Home) into the coalition of the government. That is the news of the day. They signed the agreements last night and it now has to go up for a vote in the government. It is likely to pass the vote and we will see Labor sitting in the same government with Yisrael Beiteinu.

This is an amazing turn of events. A few months ago Labor refused to join the government coalition if Olmert would invite Lieberman's party. The two parties are diametrically opposed in their outlooks and beliefs and (they say) share no common ground. There is no way they could sit together.

Well, it looks like they will now find a way.

It is not final yet, as Labor is still deliberating its reponse. Will they pull out? Some ministers from Labor support pulling out and some support staying in. Olmert obviously believes Labor will stay in, as he is bringing Lieberman in despite Labor's wishes.

I too think Labor will decide to stay in, though I think it will be a big mistake if they do so. By staying in the government they will have lost their balance of power. Right now every party holds the balance of power because each party can threaten to topple the government (except the Pensioners Party - they are not big enough to wield that power). Once Lieberman joins, the government will have been expanded beyond the ability of any one party to hold that influence.

In general that sounds great from the perspective of the Prime Minister. However, from the perspective of Labor (and Shas) it is catastrophic. It means they will not have the power to insist on certain positions they want implemented. They will have lost all their power.

The voter base of these parties is already upset at them. Labor voters are upset with the way Amir Peretz has been running the party. They are upset with the way he ran the war. They are upset with the way they have abandoned social issues. If they now choose to sit with Lieberman, thereby abandoning their position in not sitting with [what they call] a far right party, their voters will not forgive them. Right now, if elections were to be held today, Labor would be taking a big hit, which is what the supporters of sitting with Lieberman are afraid of. If they sit with Lieberman, they will take an even bigger hit.