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Kadima leader and Foreign Minister Tzipi Livni met with Labor Chairman and Defense Minister Ehud Barak at her office in Jerusalem for a second time on Wednesday if efforts to negotiate Labor's participation in a new government under Livni's leadership.

Associates of both Barak and Livni reported "good progress" in their efforts to achieve an agreement.

The Labor Party was set to convene on Thursday to discuss the details of the meeting.

Barak has insisted that he welcomes general elections, which would be held if Livni fails to recruit a majority of 61 MKs to join her coalition. However, it appeared Tuesday that he was willing to negotiate joining Livni's government.

During a Rosh Hashanah event at the Labor Party headquarters in Tel Aviv, senior party officials all spoke in favor of joining the coalition, given it was a stable, long term one.

Barak said the Labor Party would make every effort to help form a stable government, capable of realizing its goals. He added that should they succeed in reaching a true partnership, he would be more than willing to take part in the coalition, but if such cooperation is not possible, he is not afraid of elections.

Barak repeated Labor's demand that the Supreme Court be granted autonomy as a condition for the party's participation in the government. Labor officials responded to Livni's objection to open coalition agreements saying it's unreasonable that agreements signed three years ago between Olmert and Amir Peretz serve as a basis for a new government.

Meanwhile, Shas Chairman and Trade Minister Eli Yishai announced Wednesday that he had appointed a negotiations team to conduct coalition talks with Livni and her Kadima Party. Its members were instructed not to compromise on the issue of allowances for poor children.