Shamir and His New Crew: Hardly Loose Cannons : Fears of extremism are exaggerated. This eclectic mix honors Western values and is strong enough to make peace.

When the Israeli government led by the Likud Party’s Yitzhak Shamir fell in March after a parliamentary vote of noconfidence, the Bush Administration could barely suppress its glee, anticipating that opposition leader Shimon Peres would convert his majority in the Knesset into a pliable government led by the Labor Party. Early reports predicted the end of Shamir’s career and Peres’ comeback.

Americans unfortunately do not understand Israeli politics. If they did, President Bush and Secretary of State James A. Baker III would have been far more circumspect in their earlier criticisms of Shamir. Small blocs are always trying to bring down Israeli governments in the hope that they will be able to leverage greater power in the new constellation that emerges from the ashes. The religious parties, in fact, are now in just such a position.

It hasn’t always been so. In November, 1988, the religious parties overplayed their hands when, perceiving their capacity to hand Shamir a parliamentary majority without the participation of the Labor Party, they demanded new religious legislation that exceeded the secular majority’s tolerance level. Shamir then had to ally with Peres.

But when Bush and Baker drove the Israeli government into chaos three months ago with their terms for promoting Israeli-Palestinian talks, the religious groups saw a new opportunity: They could join Peres in bringing down the “unity” governent and then negotiate with Shamir, knowing his bottom line from the outset.

The government that has emerged will not be marked by the religious extremism feared by its critics. The religious parties, now cognizant of Shamir’s limits, withdrew a number of the demands they had put forth 20 months ago. They will get five ministries, three of which (Religious Affairs, Interior, and Education) they have held before. A fourth, Absorption, will simply work to integrate new Soviet immigrants into Israeli society.

Shamir’s government, contrary to his opponents’ worst fears, actually offers the best possible opportunity to move forward on the panoply of major issues that link the United States and Israel.

Just as the religious dimension of Israel’s new government has been exaggerated by its critics, so has the “right-wing” factor. Yuval Neeman, the new minister of Science and Energy, is universally recognized as the nation’s leader in the field. While his Tehiya party does advocate annexing Judea and Samaria, more commonly known as the West Bank and Gaza, it has been flexible enough to sit in coalitions with Labor. And Ariel Sharon, who lobbied aggressively for the defense portfolio, was forced to settle for the housing ministry; defense will be in the hands of Moshe Arens, the outgoing foreign minister and former ambassador to the United States. Arens is known as both a pragmatist and a technocrat with American-bred values.

Surprisingly little attention has been paid to Shamir’s naming of David Levy as foreign minister. Levy is a charismatic figure in Israel’s majority Sephardic community, which is rooted in North Africa.

He is Israel’s first foreign minister to speak little English and Americans know little about him. He is fluent in Arabic and French; both languages are likely to prove important in relations with the Arabs surrounding Israel. Those who have followed his career recognize that Levy is the Likud’s least ideological leader.

In all, it is an eclectic mix--balancing ideologues with pragmatists and religionists with secularists. Americans will be pleased that Israel, which has become the last Western outpost of economic socialism, will be committed to implementing productivity-based capitalist principles. At the same time, the new government will be strong enough to make peace. Observers sometimes forget that Labor never signed a peace accord with any Arab government; only Menachem Begin’s Likud did that.

Yes, this new government can offer major breakthroughs. But the Arab world will have to present its own peacemakers so that Shamir can talk with someone serious about living in harmony with a Jewish state.