In Israel, the Political Casualties Start to Mount

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The Lebanon cease-fire is holding for a second day, but the casualties in Israeli politics are just starting to mount. Israeli Defense Forces Chief of Staff Dan Halutz, an ex-fighter pilot who was the chief strategist of Israel's less-than-satisfactory war against Hizballah, is still catching flak for Israel's failure to deliver a killing blow to Hizballah during the four-week campaign. But Haltuz is now in deep trouble on the home front as well, where he stands accused of an unusual case of insider trading that some might argue borders on war profiteering.

On Tuesday the Israeli newspaper Ma'ariv claimed that three hours after Hizballah fighters ambushed an Israeli patrol, killing eight soldiers and kidnapping two others — the event that triggered the war — Haltuz called his stock broker and asked him to sell off nearly $30,000 of his shares. Haltuz got his money out just in time; the Tel Aviv stock market fell by over 8% in the first two days of the war.

When news broke of Halutz's share sell-off, legislators, radio announcers and normally bland-faced TV anchors all began calling for his resignation. The country's top-ranked warrior admitted selling off the shares, but denied doing any wrong. One Knesset member said Halutz was guilty of insider trading, not to mention taking his eye off Hizballah in the critical, early stages of the conflict, when it still seemed possible that Israeli searchers might rescue the two captured soldiers.

Halutz's two superiors, Prime Minster Ehud Olmert and Defense Minister Amir Peretz, are also in dismal shape with Israelis. A Haaretz newpaper poll on the eve of the U.N.sponsored truce with Hizballah showed Olmert's approval rating dropping from 75% at the start of the Lebanon campaign to 48%. Peretz fell even lower, from 65% to 37%. After the cease-fire, opposed by many Israelis who thought that Olmert buckled to international pressure and gave up the fight against Hizballah too soon, the Prime Minister's popularity may well have fallen even further.

During a Monday session of the Knesset, Olmert was heckled by legislators as he admitted "deficiencies" in the way the war was handled. The opposition leader, Benjamin Netanyahu of the right-wing Likud party, and the likeliest challenger to Olmert's coalition cabinet, then went on to list what he described as the government's multiple "failures" in readying for war, protecting israelis from Hizballah bombardments and carrying out an indecisive campaign. In a rare show of unity, Likud right-wingers and Labor legislators joined to call for a high-level inquiry into all that went wrong in the war against Hizballah. A headline this week in the Jersualem Post, a daily that fully backed the Lebanon war, read: "The Olmert Government Must Go."

Making the situation worse for Olmert is how he ended the war. Weary reservists coming back from the Lebanese front spoke angrily to the press about being under-equipped and poorly commanded from the top. Few could understand why Olmert finally decided to launch a massive ground campaign — just 48 hours before the cease-fire took effect — inwhich over a dozen soldiers were killed and scores more wounded. Israel said it will start withdrawing troops from hard-fought positions inside southern Lebanon within the next 10 days, once U.N. forces arrive. Meanwhile, Olmert has reportedly approved negotiations to exchange the two captive Israel soldiers for Lebanese prisoners, a step, perhaps, that might have avoided this short and brutal war in the first place. --with reporting by Aaron J. Klein/Jerusalem