Israeli Foreign Minister and Kadima Party leader Tzipi Livni on Thursday moved closer to forming a new ruling coalition to replace the caretaker government headed by Prime Minister Ehud Olmert.
Earlier in the week Livni signed an agreement to bring the powerful Labor Party into her cabinet, but not before surrendering veto power to Defense Minister and Labor chief Ehud Barak.
On Thursday, Livni met with the leadership of the other large party she needs to form a stable majority coalition: the ultra-Orthodox Shas Party.
The meeting was described as successful, though no details regarding how much of Shas' financial demands Livni agreed to were forthcoming. Shas wants Livni to alter the 2009 national budget to include an additional 1 billion shekels for child allowances, as well as additional funding for religious schools.
Transportation Minister Shaul Mofaz, who narrowly lost the Kadima leadership race to Livni, called Shas leader Eli Yishai earlier in the day to urge him to join Livni's coalition.
While agreeing to Shas' demands would put Livni in a difficult position vis-a-vis Labor, none of the three parties are interested in going to general elections at present, which polls show would result in a firm victory for the opposition Likud Party.
If Livni cannot form a new government within the next month, early elections will be have to be held by March of next year.