Israeli media say the Kadima and Labour parties have reached an agreement to form a coalition headed by Foreign Minister Tzipi Livni.
The draft accord still needs to be finalised and ratified by party institutions. However, a coalition of Israel's two largest political parties would still leave Livni short of a workable parliamentary majority. Kadima officials said she planned to continue efforts to persuade the Jewish ultra-Orthodox Shas party to join a coalition under her leadership. Livni was elected by Kadima members last month to take over as party leader from Olmert, who resigned as prime minister in a corruption scandal. Olmert remains in office in a caretaker capacity until a new government is formed. If Livni fails to present a new cabinet by the beginning of November an early parliamentary election will have to be held.
(Deutsche Welle)
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