Prime Minister Benjamin Netanyahu said on Monday that Defense Minister Ehud Barak's split from the Labour Party has strengthened Israel's governing coalition.

"The government has grown much stronger today, in its governance, in its stability -- and this is important for Israel," Netanyahu said after Barak and four Labor allies broke from the party.

"The whole world knows, and the Palestinians know, that this government will be around for the next few years and that it is with this government that they should negotiate for peace," Netanyahu told reporters. 

A senior aide to Netanyahu indicated earlier in the day that Barak's decision would allow the government to operate more smoothly. Netanyahu had been fully aware of Barak's decision, the aide told Israel Radio.

"Ultimately, this move is going to serve to stabilize the government and in so doing we hope to strengthen the peace process," said a member of Netanyahu's staff.

"There were people who were telling the Palestinian leadership that the Labour Party was about to bolt, that the coalition is unstable, that they can wait this government out," added the staff member, who asked not to be identified.

"Today's development shows that was not a correct analysis, and it is our genuine hope that the Palestinians will be returning to the negotiations soon and once those negotiations start we hope we can move forward towards a historic agreement."

Responses from Knesset factions began filtering in soon after Barak informed lawmakers of his decision in a letter to Knesset.

Opposition leader and Kadima chairwoman Tzipi Livni said during a Kadima faction meeting  that "it is a bad day for Netanyahu's government but I believe it is also a day of hope for Israel."

"The Netanyahu government is a narrow government that is crumbling from within due to political degeneration and the absence of direction or vision," Livni said. "The only medicine for the government's political opportunism and loss of principles is elections. Kadima calls again today in a loud clear voice – go to elections."

MK Aryeh Eldad, of the right-wing National Union – National Religious Party, said that Barak's decision to quit the party provided only "half" of a solution. "The fragmentation of the Labor Party is only half the battle; the second half will take place when Barak ends his political career and puts us out of our misery," he said.

MK Ilan Gilon, faction whip of the left-wing Meretz, said Barak's ideology had never been one with the dovish Labor Party.

"He never shared the values of the Labor movement," said Gilon. "We can only hope that the rest of the Labor faction still sitting in the government will leave the coalition as well."

He urged the remaining Labor ministers to join parliamentary force with Meretz and consider establishing a united social-democratic Zionist movement.

An unnamed source in the Likud party criticized Barak for taking on the political ideology of hardline Foreign Minister Avigdor Lieberman. "Barak has established his own Lieberman-like political party, and has surrounded himself with four dwarves who will do his bidding."