The move by the Israeli parliament, the Knesset, to dissolve the right-wing Likud bloc coalition government of Prime Minister Benjamin Netanyahu and set elections for May 17, nearly a year and a half before the end of its term, has exposed the growing crisis within the Zionist political establishment and Israeli society as a whole.

The immediate source of the downfall of Netanyahu's government lies in his attempts to maneuver with Washington and the Palestinian Authority over the so-called peace process, while simultaneously trying to hold together the fractious collection of right-wing Zionist and religious parties that have made up his administration.

Elected in 1996 on a platform of intransigent opposition to the "land for peace" Oslo accord negotiated by the Israeli Labor Party government and the Palestine Liberation Organization, Netanyahu was able to pose for several years as the unwilling custodian of a deal made by his predecessor.

In October, however, he found himself compelled by US pressure to accept the so-called Wye River accord. Brokered by the Clinton administration at the Wye Plantation in Maryland, the deal committed the Netanyahu government to withdrawing Israeli occupation forces from 13 percent of the West Bank in return for guarantees of Israeli security from Yassir Arafat's Palestinian National Authority. This included an agreement to place Palestinian security forces under the direction of the US Central Intelligence Agency for the purpose of conducting "anti-terrorist" operations inside the Palestinian-run territories.

The Israeli government negotiated the deal with the intention of canceling it the moment Arafat's mini-state failed to prevent the next, inevitable terrorist attack in Israel. Nevertheless the agreement provoked angry demonstrations by Zionist settlers. The very political forces that prepared the 1995 assassination of Labor Prime Minister Yitzak Rabin by denouncing him as a traitor began condemning Netanyahu in the same language.

Attempting to placate these forces--the elements that brought him to power and have served as the bedrock of the Likud coalition--Netanyahu announced a freeze on all territorial changes, thereby antagonizing Washington and provoking a split with forces in his own inner circle who are reluctant to subordinate Israel's strategic relationship with US imperialism to the political exigencies of keeping Netanyahu in power.

The result has been the shattering of the right-wing coalition under conditions in which the Labor Party has no credible alternative program. Underlying the political disarray in the two traditional camps of Zionist politics is the fragmentation taking place within Israeli society itself.

The Israeli state entered the new year with no budget, after the ultra-Orthodox religious parties announced they would block any vote unless the Knesset intervened to overturn an Israeli court decision accepting the legality of conversions carried out by Reform and Conservative rabbis. The ruling challenged the Orthodox leadership's monopoly on religious affairs that had been established under Likhud governments.

For Netanyahu to bow to the ultra-Orthodox parties would mean to further alienate those secular supporters of his government who are outraged by the increasing domination of the most backward religious elements over key areas of Israeli life. At the same time, Netanyahu was able to form his coalition government only with the support of these very parties.

If no vote is taken, the current budget remains in effect for the next three months. Netanyahu wants a new budget, both for domestic political reasons and to meet demands of international finance capital for further deficit cutting measures.

Israel's economy remains stagnant, with last year's growth rate falling to 1.9 percent, compared to 2.4 percent in 1997. The official unemployment rate stands at nearly 10 percent and there are growing indications of the class polarization that underlies the political crisis.

A report released at the end of last year entitled "Children in Israel--1998" found that 21.8 percent of the country's children are living below the poverty line. The number of children living in families subsisting on government welfare assistance has more than doubled over the past decade.

Increasing poverty and social inequality have given rise to growing unrest within the Israeli working class. More than 100,000 municipal workers staged a warning strike on January 10, shutting down government offices and halting garbage collection and other essential services. Many of Israel's public employees have not been paid for as long as three months because of the country's budget crisis.

Netanyahu's erstwhile colleagues in Likud, meanwhile, are bolting in all directions, preparing to challenge him in the upcoming election.

Benny Begin, the son of former Likud leader Menachem Begin, representing the "whole land of Israel front" has declared his candidacy on a platform calling for the abolition of the Oslo accords and a return to Zionist over "Eretz Israel," i.e., the restoration of Israeli control over all of the occupied territories.

Another of the prime minister's renegade ex-allies is Avigdor Lieberman, the government's former director-general and a key political operative in Likud. He has formed his own party, calling it "Israel Is Our Home," and is attempting to turn the same kind of right-wing populism employed by Likud against Netanyahu. Lieberman has denounced the current government as a "police state," while declaring that the country is being run by a "social oligarchy."

Dan Meridor, the ex-Likud finance minister, has quit for a possible run for prime minister as the leader of a "centrist" bloc. He is vying for the support of the same party that retiring Israeli Army Chief of Staff Amnon-Lipkin Shahak is seeking to lead.

Shahak has led early polls, benefiting from the fact that he has no political record at a time when a growing number of Israelis are disgusted with the politicians of both major political blocs. As head of the Israeli military, he was responsible for leading "Operation Grapes of Wrath" in 1996, a savage attack on Lebanon in which Israel's bombing of civilians in the village of Qufur Qana led to international condemnation. As a younger officer in the 1970s, he participated in military hit squads that carried out assassinations of PLO leaders in Lebanon.

On Monday, Moshe Arens, a former Likhud Defense and Foreign Minister, announced his intention to challenge Netanyahu for the leadership of the Likhud Party in primaries to be held on January 25. Arens's bid to replace Netanyahu as leader of Likhud and become the party's candidate in the May 17 election is particularly striking, since Arens gave the much younger Netanyahu his start in Israeli politics and served as the present prime minister's political mentor.

Significantly, Labor Party leader Ehud Barak is General Shahak's predecessor as Chief of Staff, an indication of the weight of militarism in the Zionist political establishment. The Laborites have not been able to generate any outpouring of popular support, despite the increasing dissatisfaction with Netanyahu. The party appears to be waging a defensive campaign, as Likud accuses it of sacrificing Israeli security and preparing to surrender unilateral control over Jerusalem.

The issue of security will gain increased prominence as the election approaches. The Likud regime can be expected to provoke violent confrontations with the Palestinians as it seeks to win back its right-wing base with demonstrations of intransigence. Even as the first candidates announced their intentions, the West Bank town of Hebron remained sealed off by the Israeli military. Palestinian protests broke out after occupation troops shot and killed a youth they had seen playing with a toy gun.

The government, led by its Foreign Minister Ariel Sharon, is acting to expand Zionist settlements in the West Bank and tighten its security grip over the territory, even though it has formally pledged to turn back land to the Palestinian Authority.

Security roads crisscrossing the territory and linking settlements with each other and Israel proper, combined with security zones running the length of the West Bank's western border already, render any Palestinian state that Arafat might proclaim a divided group of impoverished and powerless cantons. Disillusionment among the Palestinians with the empty promise of nationhood can only lead to increasing unrest and growing confrontations between the people and the Palestinian Authority.

The impasse in the so-called peace process combined with the political fragmentation within the Israeli political establishment are generating increasing unease among many of Israel's more thoughtful political analysts. The Jerusalem Post, for example, published a New Year's Day column entitled "The Man on Horseback," warning of the dangers posed by the present situation.

"Public disillusionment with democracy will pave the way for the appeal of the non-politician, the "man on horseback," who promises to sweep away the dirty deals and make things work, even at the cost of suspending democracy itself," the column stated. It concluded with the warning, "We may continue to go to the polls, but sooner or later (and probably sooner), our only choice will be between anarchy and dictatorship."