Prime Minister Binyamin Netanyahu formed a team to handle negotiations on the 2013 state budget Sunday in an effort to determine whether he can avoid the early election that would have to be held if the budget does not pass on time.

Netanyahu sent the director-general of the Prime Minister’s Office, Harel Locker, and coalition chairman Ze’ev Elkin to Yisrael Beytenu and Shas to try to draft a majority for the budget, which legally must pass in the cabinet and be submitted to the Knesset by the end of October.

Based on the results of the talks, Netanyahu will make a decision during Succot on whether to advance the election to January or February or to pass the budget and hold the race as scheduled in October 2013.

Sources close to the prime minister strongly denied contradictory reports in the anti- Netanyahu newspaper Yediot Aharonot that he had already decided to go to the polls and in the pro-Netanyahu Israel HaYom newspaper that he expected to pass the budget and avoid an election.

“Everyone can speculate however they choose, but it won’t change the fact that the prime minister has not yet made a decision,” said a source close to Netanyahu who has discussed the question of early elections with him.

Netanyahu has received advice on both sides from Likud ministers and his closest advisers. His decision is expected to be affected by his talks on preventing the nuclearization of Iran in New York just as much as by the deliberations with Yisrael Beytenu and Shas in Jerusalem.

Both parties have reported to Netanyahu’s representatives that they do not want early elections to be held but that they have red lines. Yisrael Beytenu chairman Avigdor Liberman told Israel Radio that holding an election would not affect the economy, which depends on exports to markets in Europe and the US that are not doing as well financially.

“I am not among those who think the next election is unavoidable,” Liberman said. “The attempt to pass the budget should not be avoided. It’s not easy or comfortable to pass a budget in an election year, but responsibility requires it.”

Labor chairwoman Shelly Yacimovich complained that in a normal year, the budget is drafted by September, but now government ministries do not know how to plan.

“Everyone is walking like blind people in the dark and I can’t even begin to describe the economic damage this causes,” Yacimovich said.

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