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| Version 0 | Version 1 |
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| Key party turns down Livni offer | Key party turns down Livni offer |
| (20 minutes later) | |
| The Shas party, a key player in Israeli coalition talks, has said it will not back Foreign Minister Tzipi Livni. | |
| Ms Livni, head of the largest party, Kadima, said on Thursday Israel would face elections if a government was not formed by Sunday. | |
| She has the support of the Labour party but is still short of a majority. | She has the support of the Labour party but is still short of a majority. |
| Correspondents say Shas's decision is a major setback for Ms Livni. She may still be able to form a government, but it will be considered weak. | |
| After intense negotiations, the ultra-orthodox Shas party said the party was unable to reach agreement with Kadima over the status of Jerusalem and social welfare benefits. | |
| "Shas has asked only for two things... real financial help for the (financially) weak in Israeli society and and protection for Jerusalem... which is not merchandise for sale," a party spokesman said, according to Reuters news agency. | |
| Ms Livni is committed to continuing peace negotiatons with the Palestinians, but Shas is opposed to a government willing to discuss the status of Jerusalem. | |
| Ms Livni's deal with Labour gives her a total of 48 seats in the 120-member Knesset. | |
| She could still form a government if she can secure the support of left-wing Meretz and the Pensioners Party. |