Shalom to Enter Netanyahu Coalition as Vice Premier

Likud MK also to serve as Regional Development Minister, following days of rift with party chairman Netanyahu.

Lawmaker Silvan Shalom - Likud Chairman Benjamin Netanyahu's chief party rival - agreed on Tuesday to enter the incoming government, after days of a chasm many feared would divide the faction and hamper the ability of the new coalition to function.

The schism was growing wider on Tuesday after a meeting scheduled to resolve the row over the latter's role in the next government was postponed indefinitely.

The two finally held talks in the late afternoon, only half an hour before Netanyahu's government was to be sworn in at the Knesset in Jerusalem.

Shalom agreed to Netanyahu's offer to serve as Vice Premier and as Regional Development Minister in the new coalition.

Netanyahu had been trying to find a suitable ministerial post for Shalom, who previously served as foreign minister under former prime minister Ariel Sharon.

The position of vice premier had previously been promised to Moshe Ya'alon, but Netanyahu is reportedly willing to appoint two lawmakers to the position.

Shalom initially rejected the proposal, and sources close to him said, "Netanyahu is not proving himself to be someone seeking to resolve the crisis."

Meanwhile, Yisrael Beiteinu Chairman Avigdor Lieberman is threatening to pull his influential party out of the new coalition if the foreign ministry is returned to Likud in the event Lieberman is forced to resign.

The Yisrael Beiteinu website on Tuesday posted a statement warning Netanyahu that "if the foreign ministry portfolio returns to Likud, Yisrael Beiteinu will return to the opposition."

Yisrael Beiteinu has 15 seats, making it a key part of Netanyahu's new government. The party's election campaign promise, to make all Israelis take a loyalty oath at the risk of losing their citizenship and Lieberman's strongman persona have received a cool international reception.

As was speculated on Monday, Netanyahu appointed Likud MK Yuval Steinitz Finance Minister in the new government, after a meeting between the two early Tuesday morning.

While the appointment was a concession to Netanyahu's original intention to hold the Finance portfolio himself, he will still head the financial cabinet which will direct the government's overall financial strategy.

The decision to appoint Steinitz as Finance Minister came after his recent reluctance to be appointed minister in the Finance Ministry over the preceding days.

Rumors of Steinitz's appointment raised tension within Shalom's office in recent days, though the latter was expected to persist in efforts to be granted the finance portfoliountil a formal announcement was made. Shalom staffers also tried to persuade Netanyahu to give him the position of acting prime minister in the event of the prime minister's absence.

Netanyahu has officially asked the Knesset to hold a swearing-in ceremony for his new government - which, with some 30 ministers and at least another six deputy ministers, will be the largest in Israeli history.

The ceremony is scheduled to take place at 5 P.M. Tuesday.

While the ministerial appointments of all of Netanyahu's coalition partners have been finalized, there is still uncertainty within his own Likud party. As of late last night, Netanyahu was still meeting with senior Likudniks, with no final decision having been made as to who gets which portfolio.

Meanwhile, Kadima leader and outgoing foreign minister Tzipi Livni said Monday that Kadima will serve the nation from the opposition. "This is the service we have decided to give. The government that will be formed tomorrow will be large and bloated, with portfolios and ministries divided into fractions and sub-fractions. Tomorrow will also see the rise of a large opposition headed by the largest party," said Livni during a Kadima meeting held in the Knesset.

"We are in the opposition out of our own choice. We could have been part of the phenomenon that we have witnessed, but we chose to follow our own path. We will serve as a responsible opposition when there are significant issues regarding security and economics, but we will not hesitate to criticize the government whenever it does not represent the good of the nation," Livni told her colleagues.

President Shimon Peres commented Monday that the new, right-wing government was already off to a "promising" start, despite concerns both at home and abroad regarding the position it will take vis-a-vis peace efforts with its neighbors.

"They say we shall continue the negotiations with the Palestinians, we shall negotiate with each of our neighbours ... and see what can be done in terms of peace on the regional level," Peres said during a visit to the Czech Republic, which currently holds the EU's rotating presidency.

"I would say this is a very reasonable and promising beginning."

After meeting Czech President Vaclav Klaus, Peres also highlighted the need of a broader peace solution.

"In addition to the traditional conflict between the Palestinians and ourselves, there are some other conflicts of a wider nature... and that makes the region as such the center of the problem.

"Until now we were talking about bilateral disagreements," but now one can see "an attempt to bring in a regional peace, not just a bi-national peace," Peres added.