Israeli Prime Minister Ariel Sharon has removed the Shinui party from his governing coalition today after Shinui voted against Sharon's proposed budget in the Knesset today. The fall of the government could jeopardize Israel's planned pullout from the Gaza Strip which is scheduled to take place in 2005.

Sharon handed letters of dismissal to all Shinui ministers in his cabinet. The dismissals take effect in 48 hours. Sharon's Likud party holds only 40 of the 120 seats in the Israeli Knesset so unless a new coalition is formed within a short amount of time, early elections are inevitable.

Shinui is a secular political party and they objected to the budget's inclusion of large amounts of money to religious parties during an Israeli budget crunch. Under Israeli law, the government must pass the budget by March 31 or resign.

'We had a very amicable discussion with Mr. Sharon who expressed his regrets about our departure from the government and we expressed our regrets about how we had to leave the government,' said Tommy Lapid, the leader of the Shinui party and outgoing justice minister.

Numerically, Sharon's best chance to form a coalition would be to join forces with the more left leaning Labor party. It was Labor's Yitzchak Rabin and Shimon Peres who negotiated the Oslo Accords with the P.L.O. in 1993. Sharon is expected to face strong opposition from his own right wing if he tries to form a unity government with Labor.

Labor and other left-leaning parties voted against the budget due to deep spending and social cuts proposed by Sharon.

Those close to Sharon were confident that early elections could be avoided. 'We will get the budget passed at another date in the near future. If Shinui does not vote in favor, they will be fired. We don't care one way or the other,' said Assaf Shariv before this afternoon's vote.

Immigration Minister Tsipi Livni was also sure early elections need not be held. “Most committee members don’t want our government to fall,” he said. “They understand that to force early elections is a mistake the right wing repeated in the past with poor results.”