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Poll setback for Sharon party

Jerusalem, Oct. 29 (Reuters): Prime Minister Ariel Sharon’s Right-wing Likud party slumped in local elections across Israel because of economic troubles aggravated by violence in a Palestinian uprising, returns showed today.

The results did not affect Likud’s dominance on the national level where Sharon’s tough security policies against Palestinian militants are popular. He does not face another vote until 2007. But yesterday’s municipal polling attested to growing dissatisfaction on bread-and-butter issues.

“You can’t separate the local elections completely from the general picture,” said Shalom Yerushalmi, political analyst for the Maariv daily. “These elections were very important for the Prime Minister.” “Likud takes a pounding,” blared a headline in the Haaretz daily of the voting in 156 communities in the country of 6.6 million.

Maariv said Likud lost control in three of the five main Israeli cities it ruled before Tuesday's elections, while the centre-left Labour party took two more cities to wind up on top in eight of the 12 major municipalities.

Run-off votes were scheduled in 10 municipalities because no candidate managed to win over 40 percent of the vote.

”Labour came out better than the Likud,” said Israel radio's political analyst Hanan Crystal.

”Labour expanded its power base and we are back with two large parties in the municipal court. But have we returned to a situation of two large parties in the parliamentary court' That we will see in four years.”

Both parties claimed satisfaction with the results.

Local elections reflect the ethnic and religious lines of Israeli communities, but often highlight national concerns.

Sharon has yet to deliver on his election pledge to defuse a Palestinian revolt against occupation in the West Bank and Gaza Strip began in September 2000. He is also dogged by two funding scandals over which his sons have been questioned by police.

Violence has worsened an economic downturn that has boosted unemployment from 8.8 percent when Sharon took office in March 2001 to 10.6 percent in August, the latest figure available.

One Likud mayoralty candidate on Wednesday said Likud Finance Minister Benjamin Netanyahu's planned public-spending cuts in the 2004 budget cost him the local election.

The cuts have prompted labour unions to declare what could be a crippling general strike next week.

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