Interior Minister Eli Yishai told Ynet that Shas would not resign from the government if an additional freeze on construction is imposed on West Bank settlements.
Earlier, at a Likud meeting ahead of the opening of the Knesset's winter session, Prime Minister Benjamin Netanyahu hinted at a softening of Israel's stance on the continuation of the settlement freeze in the West Bank.
"We must be realistic. We also have other interests. There are other channels no less important than the settlements to our interests," Netanyahu said.
Defense Minister Ehud Barak opened the session for Labor by saying, "The referendum bill, as was passed today by the Ministerial Committee for Legislation, questions the government's willingness and ability to lead negotiations."
"Israel's government headed by Netanyahu is obliged to advance the peace process and must do everything in its power to remove the obstacles to peace placed by this unnecessary bill," he said.
Yisrael Beiteinu Chairman Avigdor Lieberman said at his party's meeting, "I do not retract the forecast I gave at the beginning of my term, which is that this is a sturdy coalition that will live out its days."
But Opposition chairwoman Tzipi Livni, who spoke before the Kadima Party, was of a different opinion.
"Up until now Netanyahu has been juggling a lot of different things and keeping a lot of ministers handy at an expensive cost – to the public budget as well as the State of Israel and its most basic interests," she said.
"We will do whatever is needed in order to make the public understand that there are other regime options."
'Terrorist' vs 'Fascist': Rightists, Arabs collide
A few hours before the session opened a meeting of the Knesset Committee on the Rights of the Child met in order to discuss a recent stone-throwing incident in which an Arab teen was run over by a settlement leader in the village of Silwan.
The meeting spurred verbal violence between right-wing and Arab MKs, with MK Taleb El-Sana (United Arab List-Ta'al) calling MK Michael Ben-Ari (National Union) a "fascist", and the latter responding that El-Sana is "a terrorist come to stir up provocation".
"The issue is the settlers running wild," El-Sana said. "The issue is murderous Palestinians," Ben-Ari answered. "What are you doing here, enemies?"
El-Sana was thrown out, and told the press after leaving that he planned to file a complaint with the Knesset speaker about "the cynical use of a committee that became a committee for settlers rather than children".
But El-Sana's departure did not quell the disturbance. "You have no empathy for a child that got run over. You're a bunch of sociopaths," said MK Ahmad Tibi, also of United Arab List-Ta'al. "This committee needs a full-time psychiatrist. You're insane. You need to be tried. You are a bunch of fanatics."
Ben-Ari had a response for Tibi as well. "Terrorist," he said. "Go to Libya. You shoot children in the head. Go put on a dress with Gaddafi. Go bring down a plane. Even a child, if he is endangering lives, should be shot."
Attila Somfalvi and Yael Branovsky contributed to this report
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