Kadima, Labour sign Israel coalition deal

RAMAT GAN, Israel, Apr 27 (Reuters) Israeli acting Prime Minister Ehud Olmert's Kadima party and the centre-left Labour Party signed a coalition agreement today that will form the backbone of a new government Negotiating teams for the two parties signed the deal which had been finalised earlier in the day in a meeting between Olmert and Labour leader Amir Peretz, who is set to take the deal to his party's central committee on Sunday for approval.

''We achieved results and that is the most important thing -- that there is an agreement that is good for Kadima and Labour and will be good for Israel,'' said Yoram Turbowicz, head of Kadima's negotiating team.

The partnership appeared likely to pave the way for a new government to be sworn in as early as next week. Centrist Kadima won the most votes in Israel's March 28 general election but it needs the support of Labour and several other smaller parties for a parliamentary majority.

Under the deal, Labour will receive seven cabinet posts in the new government, including the senior Defence Ministry portfolio which Peretz, a former trade union leader, will hold.

Labour officials said Sunday's party committee vote would be a formality and the meeting would mainly be to decide cabinet posts.

Olmert seeks to form a broad coalition with more than 80 seats in the 120-member parliament.

He will need a strong majority in order to pursue his plan to pull out of parts of the occupied West Bank, while strengthening Jewish settlements in other sections of the territory, in the absence of peace talks with the Palestinians.

Yesterday, Kadima signed a deal bringing the seven-seat Pensioners Party into the government.

With the Pensioners Party and Labour on board, Olmert would control 55 seats in the Knesset.

Kadima was also expected to reach an agreement with the ultra-Orthodox Shas party, which won 12 parliamentary seats in the election. The six-seat ultra-Orthodox United Torah Judaism party also appeared likely to join the government.

But political commentators said the Israel Beitenu party of ultranationalist leader Avigdor Lieberman was unlikely to sign up.

Reuters PR GC2329