Israel's ruling Likud Party and the opposition Labour Party have reached agreement to form a new coalition government.
A spokesman for the Labour Party leader, Shimon Peres, said the deal would give the party eight ministerial posts and make Mr Peres Deputy Prime Minister.
The agreement is expected to help Prime Minister, Ariel Sharon, push through his plan to withdraw Jewish settlers from Gaza.
The deal will be formalised within 36 hours.
