Israel's Olmert signs key ally to new government

RAMAT GAN, Israel - Israeli acting Prime Minister Ehud Olmert has signed up the centre-left Labour Party to a coalition deal, a major step towards forming a government and pursuing his plans for the West Bank's future.

Olmert's 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.

After weeks of negotiations, Kadima and Labour officials signed an agreement at a resort complex in the Tel Aviv suburb of Ramat Gan, providing the backbone for a government whose formation could be announced as early as next week.

"At the beginning, it's like buying new shows -- it pinches at first but after some time you feel comfortable with them," said Yoram Turbowicz, Kadima's chief negotiator. "I'm sure that will be the case with us as well."

With Labour -- whose leader Amir Peretz is due to become defence minister -- and the seven-seat Pensioners Party, which signed on Wednesday, Olmert has a near majority with 55 seats in the 120-member parliament.

He is also courting two ultra-Orthodox parties as well as a Russian nationalist party as he seeks to form a broad administration with more than 80 parliamentary seats.

Olmert will need a strong majority in order to press ahead with his plan to evacuate settlements in parts of the West Bank while strengthening major enclaves in other sections of the territory in the absence of peacemaking with the Palestinians.

Olmert has pledged to set Israel's borders by 2010 with or without Palestinian agreement. Palestinians have said such a move would annex land they want for a state of their own in the West Bank and in the Gaza Strip, which Israel quit last year.

"We are to carry out a political plan that is complex and complicated," Turbowicz said. "We (also) have the struggle against social gaps. I think we can do it together if we agree to join hands."

Once the government is formed, Olmert plans to visit Washington to present the outlines of his "convergence" plan to US President George W. Bush in a meeting around May 23, Israeli government sources said.

Olmert has said he would wait, but not for long, for the Palestinian Authority government led by the militant Islamist movement Hamas to show whether it will moderate its position calling for Israel's destruction and become a peace partner.

Palestinian President Mahmoud Abbas, on a visit to Helsinki, said he would make peace overtures to a new Israeli leadership.

"After the establishment of the Israeli government, we will make an initiative to the Israelis to return back to the negotiating table," Abbas told reporters.

Kadima was also expected to reach an accord 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.

- REUTERS