JERUSALEM: Prime Minister Benjamin Netanyahu, his approval rating hit by a cascade of popular protests against the high cost of living in Israel, pledged on Tuesday to implement "huge" housing reforms beginning next week.
Student-led activists have set up tent-squatter encampments and held often rowdy sit-down demonstrations in Israeli cities to demand lower rent and land-ownership prices.
In parallel, doctors have intensified a more than four-month-old strike for better wages and conditions, spreading the sense of a crisis in a middle class that bears Israel's heavy tax burden and sustains its conscript military.
"The housing crisis in Israel is a real problem. This is not a fake issue and whoever has empathy in his heart understands it is a problem," Netanyahu said in remarks to reporters broadcast live on television and radio stations.
He unveiled a plan, dubbed "Residence in Reach", under which the broad-based coalition government would free up more state-owned land for development, provide low-rent housing for students and the poor, and cut through red tape on realty deals.
"We will complete two huge changes next week, because ultimately you have to breach the bureaucracy," said Netanyahu, a free-market champion who, as finance minister under a previous administration, cracked down on Israel's public sector.
Though his pledge on student housing received a smattering of applause from protesters watching the news conference on a television relay in Tel Aviv, otherwise they moved their hands in a uniform gesture dismissing the remarks as spin.
The crisis is paradoxical, coming as Israel enjoys economic growth that is among the world's fastest, with a 5 percent spurt seen for 2011. Despite low wages compared to Western countries, unemployment was at a two-decade low of 5.7 percent in May.
But high prices of basic goods have become headline news in Israel, supplanting concern over the stalled peace talks with the Palestinians and the attendant international censure.
Early in the year, protests forced Netanyahu to cancel a planned tax hike on petrol. Last month, public outrage over soaring cottage cheese prices led dairies and retailers to cut prices and the government to weigh ways to increase competition.
"We all feel that this is a crisis of the middle class," President Shimon Peres told reporters separately.
A poll published in the liberal Haaretz newspaper on Tuesday found 32 percent of Israelis are satisfied with Netanyahu's performance while 54 percent are not, a reversal of survey figures from May.
Then, Netanyahu received standing ovations at the U.S. Congress as he outlined tough terms for Middle East peace, 51 percent of Israelis supported him and 31 percent of respondents said they opposed his policies, according to Haaretz.
Netanyahu had been due on Wednesday to lobby Poland against the Palestinians' bid to sidestep Israel by winning U.N. approval for their claim to statehood in all of the Israeli-occupied West Bank, East Jerusalem and the Gaza Strip.
But in a reflection of shifting priorities, Netanyahu on Monday called off the Warsaw trip to focus on housing reform.