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Israeli Prime Minister Ehud Olmert and right-wing party Yisrael Beiteinu chairman Avigdor Lieberman signed an agreement on Monday evening making the party a member of Olmert's coalition.

"We agreed that teams and attorneys would sit and word the agreement. I hope that by tomorrow morning, a document will be put together," said Lieberman after talks with Olmert.

Olmert's bid for a larger coalition follows opinion polls showing a significant decline in his popularity and that of his government over their handling of the recent war in Lebanon in which the army failed to crush Hezbollah guerrillas.

In violence in the Gaza Strip, Israeli forces killed seven Palestinians, at least three of them gunmen, in fighting in which 20 people were also wounded, Palestinian officials and local residents said.

Yisrael Beitenu's participation in the government would likely shelve Olmert's plan to dismantle dozens of Jewish settlements in the West Bank, while strengthening others.

Olmert announced that the "realignment plan" was no longer a pressing issue on the government's agenda following the 34-day Lebanon war ended in August.

With the addition of Yisrael Beteinu, Olmert would control 78 seats in Israel's 120-member parliament, up from just 67 that currently support him, a political gain which will enhance his prospects of passing a 2007 state budget on time.

In separate remarks to reporters, Olmert said he intended to appoint Lieberman as one of his deputy prime ministers to deal with "strategic threats against Israel," a clear reference to Israeli fears that Iran could build a nuclear bomb.

The left-leaning Labor party, with a critical 19 seats, was divided over Lieberman's addition to the government and some lawmakers have vowed to fight it. Speculation arose that Labor would assent to Lieberman joining the government rather than drop out of the coalition, a move that could hurt its popularity further.

Lieberman, an immigrant from the former Soviet Union, was once a key aide to ex-Prime Minister Benjamin Netanyahu. The conservative leader has advocated annexing West Bank settlements and transferring some Israeli-Arab towns to a future Palestinian state.

(China Daily October 24, 2006)