His negotiating prowess, his tough leadership, ostensibly never budging from his stances – has taken a step back. He has now taken a curious step in a somewhat obscure direction.
Amir Peretz's decision to back a state commission of inquiry is rather confusing. Within the political chaos reigning in Israel in the past months, the defense minister's decision can be added to the long list of obscure events that have occurred here - decisions whose rationale is somewhat ambiguous. One thing, however, has become clear: On Thursday evening the political system triumphed over the defense minister.
Peretz's decision is bizarre particularly in light of the fact that just two weeks ago in closed talks, he clearly stated that he was not interested in a state commission of inquiry and hoped that such a commission would not in fact be established.
This came just a short while after he announced the establishment of a committee that would examine the management of the military during the war - to be headed by former chief of staff Amnon Lipkin-Shahak.
But then something happened to this mistrustful man who doesn't rely on anyone but himself. The prime minister's announcement regarding the setting up of three separate committees that would be charged with probing the failures of the Lebanon war, made him lose his composure.
It immediately lifted him to the twilight zone of suspicion and fear of the unknown. Peretz couldn't figure out what the committees would produce and how the findings would affect him and his political future.
He couldn't quite comprehend what type of trick Olmert was trying to pull on him. He was concerned that someone had decided to drop all the defense ministry's war failures on his head – him, of all people, the defense novice. He was worried that the three unassociated committees would ultimately lead to a conclusion that would burden him with all the war's defense failures.
Peretz losing control over his party
His political apprehensions were also added to these concerns. Peretz is apparently losing control over his party and faction in the past few weeks. He just about managed to get the budget cutbacks approved, but found it even more difficult to figure out what was going on behind his back.
More and more senior members of his party are lashing out openly against him, criticizing his every move, castigating his conduct and his decision-making process. If anything can make Peretz lose his equilibrium, it's an uncertain political future.
And in the Labor Party the name of the game is vagueness and uncertainly. Everyone is against everyone, but even more so, now everyone is against Peretz. His political foes have beaten him, and on their part, it's just the beginning.
Olmert's associates are convinced that Peretz simply fell into line with his party, that he opted to fold vis-à-vis enemies from within his own party who are intent on undermining his control. Someone mentioned the yearning for a different type of leadership, that of Ariel Sharon for example, who dealt with his own Likud rebels without succumbing.
And what's next, it's still too early to predict what will happen to the coalition government. It won't fall apart, but something very basic in the relationship between the two leaders, took a very serious blow.
Everyone will do as they see fit
The prime minister's associates are already saying that commitments to Pertez's political career will from now on be much smaller. There will be many opportunities to see this in practice in the near future: The 2007 budget is nearing, and the Labor Party will attempt to show achievements.
And then, say the PM's associates, it will be an entirely different story, and everyone will do as they see fit.