JERUSALEM, Dec. 14 (Xinhuanet) -- Israel's coalition talks between the ruling Likud and the main opposition Labor Party broke down late Monday night when Likud rejected Labor's demands on budget, local press reported Tuesday.

    Labor negotiators left the room in anger, saying the party can remain in the opposition and support the disengagement plan.

    Labor wants some NIS 600 million (about 136.4 Million US dollars) in additional funding for university students, culture andthe elderly.

    The Likud negotiating team said it could not accept Labor's demands because they were "outlandish and would have broken the framework of the 2005 state budget."

    Nevertheless, Likud sources said they did not take the crisis seriously, describing Labor's demand as a ploy to improve its bargaining position.

    Likud negotiators expected the talks to resume on Tuesday, sources said.

    However, Labor negotiator Itzik said her party would not attend Tuesday's scheduled session.

    "We're willing to take a lot for the sake of the disengagement, but our impression is that they were quibbling with us in an insulting fashion," she said.

    Israeli Prime Minister Ariel Sharon hoped to reach an agreement on forming a unity government with Labor by Wednesday in order to allow Labor's central committee to select the party's ministers on Thursday.

    Sharon invited Labor last Thursday to open coalition talks to save his shattered government and avoid early elections that could stall his Gaza withdrawal plan.

    Likud has offered Labor the following portfolios: Housing and Construction, National Infrastructure, Environment, Communications,Social Affairs, and Transportation, plus a vice-premiership for Peres, whose responsibilities will be decided in a meeting between Sharon and Peres. Enditem