Israeli Prime Minister-designate Benjamin Netanyahu has won Labour chief Ehud Barak's agreement to a political partnership that could help Israel's next government avoid friction with Washington on Middle East peace.
Under the coalition deal with Barak, an administration led by Netanyahu's right-wing Likud would respect all of Israel's international agreements, a Labour Party official said, a formula that includes accords envisaging Palestinian statehood.
With centre-left Labour in his corner, Netanyahu would have a ruling majority of 66 seats in the 120-member parliament, a margin he could still widen by a April 3 deadline to form a government.
The agreement awaited ratification later in the day by the Labour Party's executive. Barak, who is likely to retain his post as defence minister, faces strong opposition in the forum to joining forces with the hawkish Netanyahu.
Netanyahu and Barak, an architect of Israel's recent Gaza offensive, agreed to the coalition deal after holding talks on the heels of lower-level negotiations, Labour officials said.
Labour backs the U.S.-supported peace process aimed at establishing a Palestinian state alongside Israel. Netanyahu has shied away from supporting a two-state solution to the Israeli-Palestinian conflict.
The Likud-Labour pact indirectly addressed the statehood issue that could put a Netanyahu government on a collision course with U.S. President Barack Obama, who pledged to pursue a land-for-peace deal that eluded predecessor George Bush.
"We are talking about respecting all the international agreements of the State of Israel. We are talking about there being a peace process," said Labour negotiator Shalom Simchon, giving details of the agreement.
At a U.S.-hosted peace conference in Annapolis, Maryland in 2007, Israel agreed to negotiate a peace treaty to further "the goal of two states, Israel and Palestine, living side by side in peace and security".
ECONOMIC PEACE
Netanyahu wants to shift the focus of currently stalled negotiations with the Palestinians from territorial to economic issues, a concept they reject, and which he says represents the only way out of the present stalemate.
"It should be remembered that were we not to be in this government, there would be no peace process," Simchon said.
On Monday, Netanyahu sealed a coalition deal with the Orthodox Jewish Shas party. He had already signed up the Yisrael Beitenu party led by ultranationalist Avigdor Lieberman.
But while enlisting those partners following Israel's Feb. 10 election, Netanyahu made clear he preferred a broad-based coalition -- a government of "national unity".
A sharp turn to the right within Israel's government could raise international concern already heightened by Netanyahu's promise to appoint Lieberman foreign minister.
Lieberman has proposed transferring land where many of Israel's 1.5 million Arab citizens live to a future Palestinian state in return for Jewish settlements in the occupied West Bank, and wants all Israelis to take a loyalty oath.
Netanyahy could significantly widen his parliamentary majority if the centrist Kadima party, led by Foreign Minister Tzipi Livni, changes its mind about going into the opposition.
Netanyahu has not met her demand for a commitment to Palestinian statehood and a rotation agreement that would make her prime minister for part of the next government's term.
Labour, once the dominant force in Israeli politics, won only 13 seats in last month's election to 27 for Likud, 28 for Kadima, 15 for Yisrael Beitenu and 11 for Shas.