Netanyahu signs up first two partners for coalition government

Netanyahu signs up first two partners for coalition government

By Maayan Lubell
JERUSALEM (Reuters) - Israeli Prime Minister Benjamin Netanyahu signed up his first partners on Wednesday for a new coalition government, a lawmaker and spokeswoman said, putting him on course to lead a heavily right-leaning cabinet.

The deals with the ultra-Orthodox United Torah Judaism (UTJ) party and centrist Kulanu give Netanyahu's right-wing Likud control of 46 of parliament's 120 seats.

Netanyahu's emerging government is likely to pursue tough policies toward the Palestinians, including further settlement building in the occupied West Bank and East Jerusalem, lands the Palestinians seek for a state along with the Gaza Strip.

On the eve of the March 17 election, he drew international outrage by declaring there would be no Palestinian state on his watch, backtracking from a 2009 pledge to pursue a two-state solution to the decades-old conflict.

He has until May 7 to form a government.

"We signed a coalition deal with the Likud just now," UTJ leader Yakov Litzman told Israeli's Channel One. Netanyahu then signed with centrist Kulanu party, a Likud spokeswoman said.

Likud is still negotiating with three other parties with whom it is expected to secure a 67-seat majority: ultra-nationalist Yisrael Beitenu, far-right Jewish Home and ultra-Orthodox Shas.

His outgoing cabinet included two centrist parties and had engaged in U.S-brokered peace talks with the Palestinians, which collapsed a year ago.

Jewish Home is a pro-settler party which advocates the annexation of most the West Bank, a policy Netanyahu has not embraced but which some Likud members support.

Avigdor Lieberman, the hawkish head of Yisrael Beitenu, is expected to continue as foreign minister.

Although Netanyahu has since sought to step back from his pre-election remark on Palestinian statehood, U.S. President Barack Obama told him Washington would reassess its options on U.S.-Israel relations.

"It would appear that we are entering a period without a real or realistic possibility for holding negotiations on a solution of two states for two peoples," U.S. Ambassador Dan Shapiro told Israel's Army Radio in an interview on Wednesday.

Some Israeli political commentators have suggested Netanyahu may seek to bring in centre-left Zionist Union at a later stage. In public comments however, its leader Isaac Herzog has so far ruled that option out, as has Netanyahu.

Centrist Kulanu, whose leader Moshe Kahlon who will serve as finance minister, and the ultra-Orthodox parties ran on internal social-economic issues, not o