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Prime Minister Ehud Olmert said on Thursday that the major funds will be added to the education system to implement a reform that will lower class sizes and restore lost teaching hours.

"The education system will be awarded large budgetary additions and will simultaneously undergo a thorough reform," Olmert said on the day that the government signed a deal ending a 55-day teachers' strike.

The prime minister added that he intends to "lead a reform process with an binding timetable, through talks and without compromising the major and immediate need to bring about a real change in education in Israel."

Olmert also said that within 45 days, he intends to bring before the government a plan to "reduce the number of students in classes and bring back teaching hours to the education system. The multi-year plan that will be approved by the government will determine that the number of students in each class will be 32, throughout the education system in Israel ? elementary and secondary. This multi-year plan will be formulated with the cooperation of representative organizations and it will have the validity of a binding government commitment."

"The parents, students and teachers deserve a better education system," Olmert said.

Teachers' union head: We have achieved the goals of the strikeThe chairman of the Secondary School Teachers Association Ran Erez on Thursday said "we have achieved the reform we wanted for secondary school education and all the goals of our struggle."

Erez listed the achievements of the agreement reached with the Finance Ministry and the Education Ministry as the reduction of the number of students per class, the restoration of school hours previously cut, wage increases and pay for the 55 strike days, as well as "a long line of work conditions that we didn't make public."

Erez added that on some of the issues, the teachers received a government pledge, which was "very important."

In contrast to Erez' optimism, a Jerusalem strike activist and teacher said Thursday that the signed agreement was without teeth. "There is no big news here," he said anonymously, "It angers me that this is the outcome after two months of struggle. [The deal includes] two wage offers already received by the teachers, and rejected. We will study the deal's details and see how we can continue to fight for the things that are important to us."

Earlier Thursday, after 20 hours of marathon negotiations, government officials and teachers' representatives reached an agreement mere hours before court-issued back-to-work orders were to go into effect.

According to a joint statement issued by the Secondary School Teachers' Association (SSTA), the Finance Ministry and Education Ministry "the government and the organization have reached substantial agreements that enable the renewal of studies out of mutual understanding and without back-to-work orders."

The statement added that teams from both sides were to finalize the wording of the agreement within hours.

Erez, Finance Minister Roni Bar-On and Education Minister Yuli Tamir held intensive negotiations since Wednesday afternoon in a bid to reach a deal after an attempt to bridge the gaps between the sides collapsed late Tuesday night, just after it seemed a breakthrough was finally within reach.

According to the agreement reached Thursday, the teachers will receive an 8.5 percent wage increase in exchange for two weekly hours of private tutoring. In addition, the teachers will receive another 5 percent wage increase, in accordance with a Histadrut labor federation agreement, over the course of three years. In addition, a 4 percent salary increase to prevent the erosion of teachers' wages will be pushed up. It was also agreed that the number of students in every classroom will be reduced.

In addition, the two sides will conduct talks regarding major reform in the education system. Should the sides reach an agreement within six months, the teachers could receive a 26 percent pay rise, according to Eini, which will include the increases already agreed upon.