Benjamin Netanyahu strikes new coalition deal, far-right leader to be defence minister

Israeli Prime Minister Benjamin Netanyahu clinched a coalition deal on Wednesday that will make far-right opposition legislator Avigdor Lieberman defence minister and broaden a razor-thin governing majority in parliament, officials said.

The agreement on a political partnership will be signed later Wednesday, a negotiator for Lieberman's ultranationalist Yisrael Beitenu party said.

Since winning an election last year, Netanyahu has said he would explore options to widen his one-seat majority in the legislature, and he began negotiations with Lieberman after coalition talks failed last week with the centre-left Zionist Union, the main opposition party.

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Lieberman's return to power he is a former foreign minister is likely to stir disquiet at home and abroad given his past rhetoric against Israel's Arab minority, U.S.-sponsored peace talks with the Palestinians and regional powers Egypt and Turkey.

Palestinian officials said that with Lieberman, who lives in a settlement in the occupied West Bank, back in the cabinet prospects for reviving statehood negotiations that collapsed in 2014 had grown dimmer.

The pact between Netanyahu's conservative Likud party and Yisrael Beitenu, after several days of intensive negotiations, will give the four-term prime minister control of 67 of parliament's 120 seats, up from his current majority of 61.

"Broadening the government, with the inclusion of the Yisrael Beitenu party in the nationalist coalition, is an important and required step that will ensure its stability," Likud negotiator Yariv Levin said in a statement, confirming an agreement had been reached.

Lieberman's swearing in as defence minister was expected to take place next week, with Netanyahu holding the second-most important cabinet post in the interim.

Yisrael Beitenu will become the sixth party in Netanyahu's religious-nationalist coalition.

Netanyahu has said the coalition deal, which prompted Moshe Yaalon, a Likud member and former general, to quit as defence minister in protest on Friday, would stabilise the government and enable policymaking.

In a surprise move last week, Lieberman, who has had a testy relationship with Netanyahu, voiced his willingness to negotiate a coalition agreement after it appeared the Israeli leader was nearing a deal with the Zionist Union.