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Prime Minister Ariel Sharon and Yisrael b'Aliyah chairman Natan Sharansky signed an agreement Thursday that unites their parties, and assures Sharansky a ministerial position in the next government, where he will be in charge of diaspora affairs and Jerusalem.

Sharansky is also likely to be a member of the inner security cabinet, while MK Yuli Edelstein, who is number two on the party's list, is likely to be given a deputy ministerial post.

Sources in the Likud criticized Sharon's willingness to offer Sharansky the post of minister with responsibility for Jerusalem even before he had formed a new coalition. They also said the move contradicted Sharon's stated intention of cutting down on the number of ministers in the next government.

The addition of Yisrael b'Aliyah's two seats to the Likud's 38 places Sharon at the head of a 40-seat faction in the Knesset.

There had been growing opposition within Yisrael b'Aliyah to the merger, at least until after the local authority elections slated for October. The merger was initially proposed by Sharon in a telephone conversation with Sharansky last week.

In contrast to the views of the party's national leadership, those members in the field (deputy mayors and local council members) believe that Yisrael b'Aliyah still has some independent political life left in it. They are convinced that the party will enjoy a resurgence of popularity in the municipal elections.

Party officials held several conversations with Sharansky and the other leaders in recent days, in an attempt to persuade them to hold off on any move that would lead to the demise of the party until after the results of the municipal elections were known.

The commonly held opinion was that, whatever portfolio Sharansky was offered in return for agreeing to allow his party to be swallowed up by the Likud, would not help them garner support in the run up to municipal elections.

Also Thursday, President Moshe Katsav invited Sharon for a meeting Sunday afternoon where he is expected to ask the prime minister to form a government.