Beilin, who failed to win a seat in the last general election, is hoping to revive not only his own political fortunes but that of the Israeli left by merging his small Shahar faction with the larger Meretz party in Tel Aviv on Tuesday.

Beilin will take on Meretz MP Ran Cohen for the leadership of the party in primaries scheduled to take place in February.

Meretz has six members in the 120-seat Israeli parliament, called the Knesset, but the new party will hope to attract some of Labour's 19 MPs.

The new party, to be called Yi'ud, is seen as the new hope for the left with the once-powerful Labour party in a state of terminal decline after its heavy defeat in the January polls.

"The traditional role of the opposition is to present alternatives," former Meretz leader Yossi Sarid said.

"I hope that Labour members will be faithful to their convictions and join the promoters of the Geneva Initiative."

Peres, Barak stay aloof

Peace plan's main points:

  • Waives the right of return for Palestinian refugees who were forced out in previous wars
  • Divides Jerusalem giving Palestinian Muslims control over the site of Al-Aqsa but Jews control over the compound's Al-Buraq wall, referred to by Jews as the Western Wall  
  • Jerusalem would be the capital of both a Palestinian and an Israeli state
  • All Jewish settlments built in the illegitimately expanded  boundaries of Jerusalem since 1967, housing some 200,000 settlers, would be annexed to Israel
  • Envisages the removal of most Jewish settlements in the rest of the West Bank and Gaza Strip
The alternative peace proposal has won praise from Labour heavyweights such as former leader Amram Mitzna and former speaker Avraham Burg.

While the two could be persuaded to join the new entity, observers say it is unlikely that the party's two best known members, former premiers Shimon Peres and Ehud Barak, will quit. Both have distanced themselves from Geneva.

Peres, back as Labour leader at 80, and Barak both hope to have a go at the top job once again and are unlikely to jeopardise their chances by aligning with a controversial proposal.

Labour MP Dalia Yitzik could have been speaking for several of her colleagues when she dismissed Geneva as an "empty" vehicle for Beilin's "megalomania".

'Regrettable precedent'

Fellow MP Mathan Vilnai said Geneva was "a simple university exercise of people acting without a mandate which creates a regrettable precedent".

However, analyst Mazal Mualem, writing in the Israeli daily Haaretz, said Beilin should profit from his association with the Geneva process with polls showing the initiative has the backing of about 30% of Israelis.

"Beilin could not have organised himself better timing for the momentum he needs to be running for the leadership of a fresh new party," he said.

"Beilin will market himself as capable of leading the Israeli left, a real alternative to Likud (Prime Minister Ariel Sharon's party) and not a Labour satellite. He will bring an ideological programme and executive ability in international politics."

Joseph Alpher, an adviser to Barak when he was prime minister, said the revival of the left could be one of the most important by-products of Geneva.

"It's seen the re-emergence of the left as a more coherent actor, albeit leaderless."