Prime Minister Ehud Olmert and Yisrael Beiteinu leader Avigdor Leiberman signed a coalition agreemment Monday evening, bringing the far-right Russian immigrant-based party into the government.

According to the agreement, which must still be approved by the Knesset, Lieberman will serve as vice premier, and he also will be a Minister of Strategic Threats in the Prime Minister's Office.

Lieberman will be a cabinet member and an integral part of all discussions regarding strategic decisions for Israel.

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The accord also stipulates that the system of government is to be changed, and hearings will be held in order to formulate an alternative system. Further, the accord includes a commitment to resolving the issue of couples who desire a civil marriage.

The Labor Party Central Committee will meet in the coming days in order to decide how to respond to the addition of Yisrael Beiteinu, but is expected to decide to remain in the government.

Responding to Lieberman's appointment as strategic threats minister, Labor Party Chairman and Defense Minister Amir Peretz said he "opposes the politicization of the Iranian threat."

"The Iranian threat is not a political question," said Peretz during a speach to the Israel Management Council. "The Iranian threat is not a partisan question. The Iranian threat is a national question of the first degree."

"The State of Israel must not create a situation in which the Iranian threat becomes solely Israel's problem," Peretz added.

Yisrael Beiteinu leader Avigdor Lieberman announced Monday that his party was joining the government, and that a final agreement would be drawn up soon.

"We are joining the government," he told reporters after talks with Prime Minister Ehud Olmert. "I hope that by tomorrow morning, a document will be put together."

Minutes earlier, Olmert said that said he intended to appoint Lieberman as one of his deputy prime ministers to deal with "strategic threats against Israel."

Lieberman echoed Olmert's words when he said that in his view, Israel's most pressing issue was dealing with Iran.

Following a meeting of his Knesset faction Monday, Lieberman criticized the Israeli right wing. "For thirty years the right wing has been in power, and despite this we were unable to prevent the [territorial] withdrawals," said Lieberman.

"Maybe we should change the strategy because it is wrong," said Lieberman. "I hope that also members of the right-wing factions will change direction."

Labor Party expected to remain in government
The Labor Party Central Committee is expected to meet either on Thursday or Sunday to decide the party's reaction to the addition of Yisrael Beiteinu. Analysts say the central committee will support the inclusion of Lieberman and his party, even though most Labor ministers oppose it.

Olmert also emphasized the importance of the Labor Party in the coalition Monday, making it clear he would expects Labor to remain a senior partner in the government.

Labor, according to Olmert, is important for ensuring that talks with the Palestinians would continue on some level. In his speech he promised that the government would generate negotiations with a Palestinian partner despite Lieberman's membership in the coalition.

For his part, Lieberman said Monday he believes there should be no problem for his party to be partner to a coalition that includes Labor.

According to Lieberman, his party was part of a past coalition that included Labor on one hand and far-right parties on the other, which "produced results that were not bad."

Peretz is among those opposing Yisrael Beiteinu's entry and is likely to vote against the move during the cabinet meeting.

However, Peretz does not intend to lead his party out of the coalition and will argue that he had been forced to accept the decision imposed on him by the party's central committee.

PM: No escape from changing system of government
Olmert said Monday morning that there was no escape from changing the Israeli system of government, to include elements that would strengthen and ensure the stability of the coalition for a long time.

Yisrael Beiteinu would bring 11 lawmakers into the coalition, giving Olmert control of 78 of 120 parliamentary seats.

Yisrael Beiteinu authorized Lieberman late Sunday to hold negotiations on its behalf for entry into the coalition.

The prime minister, however, emphasized that he does not support the proposed presidential system of government, and that he will not succumb to a demand by any of the coalition members to change the parliamentarian government system.

Speaking at a conference held by the Israel Management Center, Olmert said "The government cannot function when it is required to negotiate with different members of its coalition before any major vote - that could determine the government's future."

"This must be clear: A government must have a stable majority. And we must set the rules for securing this [concept], and a wide political base that would shield it."

Deal struck two weeks ago
Olmert and Lieberman reached agreement on the basic principles of their partnership as early as two weeks ago.

Olmert is planning to expedite the approval of Lieberman's inclusion in the government. According to the basics of the deal, the Yisrael Beiteinu head will serve as a senior minister with a focus on "strategic threats." As such, Lieberman will have a seat in the diplomatic-security cabinet and will be a deputy prime minister.

It is likely that the government will meet as early as Tuesday or Wednesday to vote on Yisrael Beiteinu's inclusion in the coalition, and later, possibly next week, the Knesset will be asked to approve Lieberman's appointment as minister.

Lieberman's decision to join the government was met with criticism from far-right and far-left MKs.

"Yisrael Beiteinu has abandoned its principles and is joining a left-wing government," said National Union-NRP MK Uri Ariel.

According to Ariel, it is irresponsible for Lieberman to save a government that, in his words, does not have the trust of the public, soldiers, or IDF. Ariel said that, in the moment of truth, it appears only his party truly represents the nationalist camp.

Meretz faction whip MK Zahava Gal-On also criticised the move.

"Lieberman is the strategic threat to Israeli democracy, and the consent of the Labor party is allowing this threat to become a reality," said Gal-On.