The Histadrut labor federation will shut down government offices and state-owned companies as well as banks and airline and train service in a three-hour strike Monday morning beginning at 10 A.M.

The union called the strike over what it called a dead end in negotiations for a cost-of-living allowance for salaried employees. Histadrut Chairman Amir Peretz and Manufacturers Association President Oded Tira traded accusations Monday, each accusing the other of "profligate irresponsibilty" in the conduct of the labor-management struggle.

The strike will affect all government offices and local authorities and halt take-offs and landings at Ben-Gurion International Airport. Egged and Dan bus service will not be affected.

Kupat Holim clinics will not operate during the strike but hospitals, ambulance and fire brigade services will operate as usual. Post offices, Bezeq and the Mekorot Water Company will all take part in the strike. Television and radio broadcasts will continue as usual.

The head of the Histadrut's trade union section, Shlomi Shani, said that in the private sector the strike would encompass institutions whose employees have a collective agreement and are members of the Histadrut. He said the strike would primarily affect metal, food and textile manufacturers as well as banks, including the Bank of Israel and the Tel Aviv Stock Exchange.

At a convention of Histadrut district heads called ahead of the strike Sunday, dozens of participants demanded that the union call a strike of up to three days, criticizing what they called the restraint shown by the Histadrut in the face of the erosion of salaries.

Peretz said at the meeting that the strike was aimed at warning public and private sector employers that the situation had become intolerable.

He warned that if in the wake of the strike there was no progress toward fulfilling the Histadrut's demands, workers would intensify their industrial action, which would culminate with a "popular battle" on September 1 - the first day of the school year. Histadrut sources said that teachers' unions may strike.

Peretz called on Prime Minister Ariel Sharon to intervene in the crisis and launch immediate negotiations with the Histadrut to reach an agreement on a social package agreement. Peretz warned that the workers would "reckon with political factions that had abandoned the social front."

The Association of Craft and Industry in Israel, an umbrella organization of small and medium sized businesses, has calculated that a three hour strike will cost the economy NIS 760 million and result in the loss of 6.8 million work hours.

Manufacturers Association won't pay striking workers

The Manufacturers Association announced Sunday that its members will not pay their workers for the days on which they are on strike.

In a letter sent to the association's members, Director-General Yoram Belizovski instructed manufacturers to inform workers that they would not receive a salary for the hours for which they participate in the industrial action. According to the association, the decision will affect some 38,000 workers in the manufacturing sector.