Netanyahu-Barak spat stokes early Israel vote talk By Jeffrey Heller JERUSALEM (Reuters) - Friction between Prime Minister Benjamin Netanyahu and Defense Minister Ehud Barak over relations with the United States fuelled talk on Wednesday of an early Israeli election. Ministers said the quarrel, Barak's resistance to Defense cuts in coalition budget talks and his dovish comments on peace efforts with the Palestinians were signs of a fraying alliance with Netanyahu and a national ballot as early as February. "It looks like the disputes herald an election," Vice Prime Minister Moshe Yaalon said on Army Radio. Allies in the governing coalition and commando comrades decades ago in the Israeli military, the two leaders have largely presented a united front when it comes to dealing with what they see as an Iranian drive to obtain a nuclear bomb. But now that Netanyahu has hinted heavily in a U.N. speech last week that an Israeli strike against Iran is not imminent, the infighting between the right-wing Likud leader and Barak, head of the small centrist Atzmaut party, has begun in earnest. In a report on Tuesday, Israel's Channel 2 television quoted Netanyahu as telling his finance minister: "Do you know what Barak has done on diplomatic matters? He went to the United States to stir up the argument between us and (President Barack) Obama and come across as a moderate savior. At the centre of the controversy is a visit Barak paid last month to the United States - he has travelled there frequently to meet Defense officials as the crisis with Iran intensified. On that trip, Barak made a rare detour to Chicago and met privately on September 20 with Mayor Rahm Emanuel, a former close aide to Obama. News of the meeting was leaked to Israeli media. Their talks raised speculation in Israel that Barak was trying to ease strains between the prime minister and the Democratic president and assure Obama that Netanyahu would not do anything that could be construed as support for his Republican challenger Mitt Romney. Likud cabinet minister Yisrael Katz accused Barak of undermining Netanyahu by espousing his own positions, which on Israeli-Palestinian peace have been more dovish than the prime minister's, in his meetings in the United States. Katz, interviewed on Israel Radio, would not provide more details. Netanyahu's office declined to comment on the prime minister's reported criticism of Barak. Accentuating differences with Netanyahu, Barak last month called for a unilateral withdrawal from most of the West Bank if peace efforts with the Palestinians remained stalled. Barak's proposal was widely seen as a bid to stake out new political ground before a possible election, which Netanyahu could opt to call in an attempt to build new alliances rather than battle with his current coalition partners over the budget. Barak has resisted Treasury calls to rein in Defense spending and impose other austerity measures. Other parties in the coalition have also balked at cuts in spending that could affect core constituencies. Katz predicted that if agreement on a budget was out of reach "the elections will take place in the beginning of the year," saying mid-February would be a logical date. By law a ballot must be held no later than about year from now. Interior Minister Eli Yishai of the ultra-Orthodox Shas party, has forecast an election in January or February, citing budget disagreements. An opinion poll in the Haaretz daily last week predicted Netanyahu's Likud party would win the most votes in a new election, capturing 27 seats in the 120-member parliament - the number it currently holds - and be well placed to put together a governing coalition. Hitting back at Likud criticism, Barak's office said in a statement that he acted during his U.S. visit in line with government policy and had aimed to "reduce tensions and bolster American support for Israel's security and positions." In an apparent swipe at Netanyahu, who warmly hosted Romney during a visit to Israel in July, a source close to Barak said U.S. backing must not be jeopardized by "actions portraying Israel as involved with a particular side in American politics." Netanyahu has denied playing favorites in the presidential race. Earlier this month, he dramatically ramped up pressure on Obama when he said the United States did not have a "moral right" to hold Israel back from taking action against Iran because Washington had not set its own limits on Tehran. Obama's aides were angered that Netanyahu was trying to put pressure on the president in the midst of the U.S. election campaign, despite the risk to Obama of alienating pro-Israel voters in battleground states like Florida and Ohio. Editing by Jon Boyle