Shimon Peres was ousted as Israel's Labour Party leader on Thursday in an upset victory for a trade union chief whose vow to end a ruling alliance with Prime Minister Ariel Sharon could trigger early elections.
Amir Peretz, 53, largely unknown on the international stage, was declared the winner of a rank-and-file ballot by a 42 to 40 percent margin over Peres, Labour's elder statesman who has won a Nobel Peace Prize but never a general election. Peretz's victory appeared to reflect support for his call for a return to center-left Labour's socialist roots and anger at Peres, 82, for failing to revive Israel's once-dominant party after its crushing defeat in the 2003 election.
"I expected a better evening," a glum Peres told a news conference, clearly stunned by what commentators called an upheaval in Israeli politics. Polls had predicted that Peres, an architect of now-tattered peace deals with the Palestinians, would coast to victory.
Amid chants of "the next prime minister" from supporters, Peretz, head of Israel's Histadrut trade union federation, said: "This can truly be Israel's most important hour." Peretz pledged to pull the party out of Sharon's coalition over free-market reforms and spending cuts he said have worsened the plight of Israel's poor.
Sharon has relied on Labour's support to survive parliamentary no-confidence votes against his government, already shaky because of divisions in his rightist Likud over Israel's Gaza pullout in September.
Peretz said he would call Sharon on Friday to set up a meeting, and Israel's Army Radio said he would push the prime minister to set a date for early elections, which are not due until November 2006.
Gideon Saar, parliamentary whip for Sharon's rightist Likud, called Peretz "irresponsible, very extreme" in his political and economic views and called on Likud to unite against him. Israel's shekel opened weaker after Peretz's victory.
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