By Jim Fish BBC News, Jerusalem

Members and their advisers huddle together in groups, arguing and gesticulating.

In every Israeli you find two parties. If he can't find anyone to argue with, he'll argue with himself Communications Minister Reuben Rivlin

They know that Israel is faced with daunting challenges, from the Palestinian uprising, to economic recession, and the fall-out from a possible conflict in Iraq.

But all thoughts are on the vote on the state budget and the likelihood that Labor will either walk, or be thrown out of Prime Minister Ariel Sharon's coalition government.

Communications Minister Reuben Rivlin is the Chairman of the Likud caucus in the Knesset.

He says Israel's parliament merely reflects the inherently disputatious nature of its society:

Ben Eliezer: Rift with Sharon not healed

"In every Israeli you find two parties. If he can't find anyone to argue with, he'll argue with himself... everywhere, in the street, in restaurants, in schools even, every youngster knows politics and how it works.

"I really believe that [the Defence Minister and Labor's leader] Binyamin Ben-Eliezer may eventually come round and see sense. It happened before that a crisis was resolved at the last minute - even after injury time"

Perhaps not this time.

If reports from the Labor camp are accurate, Mr Ben-Eliezer and Mr Sharon have failed to patch their rift, and Labor are set to leave the government.

The dispute over funding for the Jewish settlements is not, according to most observers, the real coalition-breaker.

This is an ego war, to see who is the leader, who is calling the shots Political commentator Chaim Shibi

Both leaders face challenges from within their own parties - former Prime Minister Binyamin Netanyahu is thought to be nurturing a challenge to Mr Sharon as Likud leader, while Mr Ben-Eliezer will face a primary contest for the Labour leadership on 19 November.

Chaim Shibi, political commentator for the daily newspaper Yedioth Ahronoth, believes these internal pressures are forcing the two coalition partners to act tough to bolster their own supporters:

"Definitely the national interest calls for more stability at this time. But this is an ego war, to see who is the leader, who is calling the shots. Until now the two were able to continue together, now it seems they can't go on."

Mathematics of survival

Prime Minister Ariel Sharon strode into the Knesset on the eve of the budget vote as bullish as ever.

Surrounded by bodyguards and admiring supporters, he commanded the audience - a tourism promotion reception - with his considerable presence. "I still hope to lead a government of national unity (including Labor) but in any other coalition of the government I will continue to make every effort to bring security and step out on the path to peace," he boomed.

High defence costs have made the budget necessary

The mathematics of survival for Mr Sharon are complicated, but there are enough minor parties to replace the loss of Labor.

That would mean a narrower, more right-wing coalition, and quite probably early elections.

Ariel Sharon took no questions but a hint of his mood might be gained from an Israeli newspaper report on Tuesday.

The reporter got through to Mr Sharon's residence. Expecting to find the Prime Minister subdued or even racked by crisis, he asked him how he was feeling and what he was doing:

"I'm sitting on my chair in front of a basket full of fresh fruit and I'm peeling an apple", Mr Sharon replied nonchalantly.

Just another crisis in Israel.