Prime Minister Binyamin Netanyahu will initiate an election that is expected to be held between mid-January and mid-February if, as expected, agreements cannot be reached with Shas and other coalition partners that would enable the passage of the 2013 state budget, Netanyahu said in closed conversations Tuesday night.

Netanyahu met with Finance Minister Yuval Steinitz (Likud) and Shas leader Eli Yishai on Tuesday and will continue to hold consultations until the Knesset’s winter session begins on October 15, before making a final decision to give up on the budget and initiate an election.

Sources in the Prime Minister’s Office said that if it were possible to pass a “responsible” budget, he would do so. But if that is not feasible, they quoted Netanyahu as saying that early elections would be called.

The prime minister said it was “important for government stability” that he complete four years in office. He was elected on February 10, 2009. By law, elections must be held on Tuesdays and February 12 is the first Tuesday after that date, so sources close to Netanyahu received the impression that it was the prime minister’s preferred election date.

Sources in the coalition reported that serious talks on the budget have not been held, even though it must legally be submitted to the Knesset by November 1.

The chances of passing the budget diminished Tuesday as arguments were revealed between Netanyahu and his coalition partners.

Defense Minister Ehud Barak (Independence) recently asked Netanyahu for a guarantee that he would be in his next government and when the prime minister refused to make such a commitment, Barak vowed to take revenge by opposing the budget.

Netanyahu told Steinitz that on a recent trip to the US, Barak exacerbated tensions between Netanyahu and US President Barack Obama’s administration in order to be seen by the US as the savior of the peace process.

Yishai, for his part, blamed the Treasury for not working to prevent an election.

Denying reports that Shas was the main obstacle to passing the budget, Yishai said he received the impression that Netanyahu had already decided to initiate elections.

In a sign that elections are near, thousands of Likud activists attended a Succot toast outside the home of Transportation Minister Israel Katz in Moshav Kfar Ahim.

In his speech at the event, Katz attacked the Likud’s rivals, including opposition leader Shaul Mofaz and Mofaz’s predecessors as head of Kadima, Ehud Olmert and Tzipi Livni.

Knesset Speaker Reuven Rivlin said at the event that if Netanyahu so chose, he could initiate an election in an hour when the Knesset reconvenes. But Rivlin said he thought Netanyahu would prefer to wait a week or two to complete the passage of key legislation.

At a Succot toast at his home in Kochav Yair, Mofaz said Kadima was ready for elections at any time. He attacked Labor leader Shelly Yacimovich and said he was the only candidate fit to replace Netanyahu.

Yacimovich, meanwhile, called upon Netanyahu to lift the fog and announce elections immediately.

“Setting a date will eliminate uncertainty that harms the economy,” she said.

“Israel needs elections in order to choose between alternatives and reset the national agenda.”

Herb Keinon and Lahav Harkov contributed to this report.

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