Sources affiliated with Shas Chairman Eli Yishai said Wednesday that he has rejected Kadima's proposal regarding the new coalition government, which was drafted by the party's chairwoman and prime minister designate, Tzipi Livni.
The sources said Yishai made the decision after consulting with Shas' spiritual leader, Rabbi Ovadia Yosef. The proposal consisted of the sum total of previous proposals offered by Kadima, which come to about $130 million.
Livni's affiliates said negotiations with Shas would continue. On Wednesday evening Kadima's negotiating team met with that of United Torah Judaism, and emerged optimistic that an accord could be reached.
On Wednesday afternoon Kadima's negotiating team also met with Meretz officials. Party Chairman MK Chaim Oron (Meretz-Yahad) said progress had been made after Kadima had agreed to meet some of Meretz's demands, which include the insurance of retirement funds in light of the financial crisis, and the allotment of additional funds to day care facilities.
Oron told Ynet he had received the impression that Livni was interested in adding Meretz to the government. One of Livni's associates said that "there is no reason that Meretz shouldn't be part of the coalition."
Kadima officials also met with representatives of the Pensioners' Party, who presented a list of their demands.
Earlier Livni met with Transportation Minister Shaul Mofaz and told him she would like to establish a government as quickly as possible, though all options were still on the table. Mofaz expressed willingness to assist in the formation of the coalition, and especially in negotiations with Shas.