By The Washington Post

Published: Thursday, March 14, 2013, 10:03 p.m.
Updated: Thursday, March 14, 2013

JERUSALEM — After weeks of tough bargaining, Israeli Prime Minister Benjamin Netanyahu has reached a coalition agreement with his two major partners, politicians said, paving the way for the formation of a new Israeli government days before a visit by President Obama.

But the signing of the accord was delayed on Thursday when the two parties accused Netanyahu of reneging on a promise to name their leaders as deputy prime ministers. Efforts were under way to resolve the dispute, and commentators said it was not expected to be a deal-breaker.

The agreement awards important cabinet posts to the two party leaders who emerged as rising stars in the Israeli election in January: Yair Lapid of the centrist Yesh Atid party, the second largest in parliament, and Naftali Bennett of the right-wing Jewish Home faction.

Their alliance in coalition talks compelled Netanyahu to meet many of their demands and exclude ultra-Orthodox parties that have been part of successive Israeli governments for decades.

Those parties have used their influence to secure funding for religious schools, seminaries and other institutions, allocations that may now be slashed.

The makeup of the coalition, headed by an electorally weakened Netanyahu, sent conflicting signals regarding prospects for movement in peace efforts with the Palestinians, an issue that is expected to be high on Obama's agenda during his meetings here next week.

Coalition accords with Yesh Atid and the small Hatnua faction led by former foreign minister Tzipi Livni call for a resumption of peace talks, but key posts were awarded to Jewish Home, putting its officials in positions where they can promote expansion of Jewish settlements in the West Bank and East Jerusalem.

Lapid, a newcomer to politics who made domestic reforms the focus of his election campaign, will become finance minister, and his party also will control the Education Ministry, where it could curb funding of ultra-Orthodox schools.

Bennett, another political novice, will be minister of economy and trade. His party also will control the Construction and Housing Ministry, which plays a key role in building settlements.

In addition, Jewish Home will chair the important Finance Committee in parliament, which wields significant influence over budget appropriations.

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