The New York based-World Jewish Congress has temporarily stopped funding its Jerusalem office following a dispute between the two offices over the appointment of a new head of the Israel branch, officials said Thursday. The decision by the New York office to withhold payment for the months of November and December comes on the heels of a a bitter struggle between the New York and Jerusalem offices of the World Jewish Congress over the recent decision by the organization's secretary-general Stephen Herbits, who is based in New York, to appoint Israeli Ambassador to the European Union Oded Eran to head the organization's Jerusalem office, without consulting or conferring with the elected Israeli board of the organization on the issue. The New York headquarters of the World Jewish Congress funds its offices around the world, including its Israel branch. The freeze in funding has been attributed by the New York office to "a major cash flow shortage," which is "expected to be resolved shortly," according to an internal e-mail forwarded to The Jerusalem Post by the New York office of the World Jewish Congress. The November 28 e-mail was sent by Chaim Reiss, the WJC's Director of Finance and Administration to the office's Israel director Bobby Brown. The WJC's New York office said that the organization is deferring a number of payments to avoid its having to take out a costly loan, noting that the Jerusalem office holds more than $200,000 in reserve funds, and will, therefore, not miss any financial obligation. "The WJC fully expects to resume the grants in a timely manner," the organization said in a written statement. But the move, coming on the heels of the bitter debate over control of the Jerusalem office, is seen by Israeli board members as an attempt to coerce them to accept Eran's appointment. "As a former treasurer of the Jewish Agency, I can tell you that their stated excuse of a problem in the cash flow is not serious," said MK Shai Hermesh (Kadima) the chairman of the Israeli board of the World Jewish Congress. "It would be like me telling you it is snowing now in the Gaza Strip," he added. The appointment of the veteran Foreign Ministry diplomat is seen by members of the Israeli board as an unilateral attempt by Herbits to unilaterally bypass the Jerusalem office from New York with a hand-picked appointee who will serve as his personal emissary. Hermesh has written to the organization's president, Edgar M. Bronfman, asking him to intercede on the whole issue but has not received a response to date. "Oded Eran has no standing in the Israel office and he will not be giving orders to anyone," said Israeli board member Tzvi Ramot. He added that he was less concerned about the temporary halt in funding than in the attempt by the New York office to wrest control of the Jerusalem office. Eran has been offered a $250,000 annual salary for the posting, according to officials in the organization. The Israel office's current director, Bobby Brown, whose position is most directly threatened by Eran's appointment, makes $156,000 a year, the officials said. In a statement, the New York office said Thursday that "the WJC Steering Committee selected Ambassador Oded Eran for a new WJC position that was created to help achieve our critical mission of educating our constituent communities around the world about the security challenges facing Israel." "Ambassador Eran is uniquely qualified for this task," the statement read. The dispute over the appointment and the effective control over the Jerusalem office, which was discussed at length at a Thursday meeting of the Israeli board, will inevitably boil over next month when the appointment goes into effect unless a face-saving compromise is worked out between the two sides in the coming three weeks. Herbits is expected to visit Jerusalem this month in an effort to reach such an eleventh-hour agreement. The annual budget of the organization's Jerusalem office has also been cut from $675,000 this year to $475,000 for 2007. The Israeli board of the non-profit organization is comprised of 26 members, including representatives of all Zionist political parties in the Knesset, as well as public bodies and international organizations which are headquartered in Israel. Before his current posting, Eran, 65, has previously served as Israeli ambassador to Jordan, and then headed the Foreign Ministry's team in the failed peace talks with the Palestinians between 1999-2001. Founded in 1936, the WJC represents Jewish communities in nearly 100 countries across the world. The organization, which has recently undergone a major overhaul due to a much-publicized case of internal financial mismanagement, is known for recovering billions of dollars in restitution for Holocaust victims. Bronfman brought Herbits, a former adviser at Seagrams, to the World Jewish Congress as part of the organization's reorganization and restructuring.