Israeli prime minister-designate Benjamin Netanyahu has announced that he has signed a coalition deal with the far-right Yisrael Beitenu party.
Its outspoken leader, Avigdor Lieberman, is expected to become Israel's next foreign minister.
Mr Lieberman is a strong supporter of the Israeli settler movement and opposes exchanging land for peace with the Palestinians.
The deal is still subject to possible pacts with other parties including that led by Tzipi Livni.
Mr Netanyahu's Likud party and Mr Lieberman's party would need to secure agreements with other parties to achieve a majority in the 120-member parliament.
However, their accord was the first step towards establishing a new government after the 10 February election.
Mr Lieberman's party polled the third largest number of seats, at 15, with Likud winning 27.
Deputies of both parties initialled the deal during talks held yesterday.
Mr Netanyahu faces a 3 April deadline to complete a government, after being given the task last month by President Shimon Peres.
