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Israel's new coalition government takes shape -

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ELEANOR HALL: Overnight, Israel's Labor Party reversed its position and voted to join a coalition
government led by the Likud Party's Benjamin Netanyahu.

This insures that the controversial former prime minister, Mr Netanyahu, can form a government.

And while the coalition would still include parties of the far right, it is likely that this
government will be more like the national unity government that was being encouraged by the
international community.

I spoke to Eli Yerushalmi, the deputy chef de mission at the Israeli Embassy, about the latest

ELEANOR HALL: Eli Yerushalmi, what difference will Labor's joining the Coalition make to an Israeli
Government led by Benjamin Netanyahu?

ELI YERUSHALMI: Well first of all the meaning of this, of Labor joining the Netanyahu Government
means that the Government is not going to be a centre-right government but a more centre government
with even elements of left.

Which basically means that this is the beginning of a national unity government which includes
large elements of the Israeli public.

ELEANOR HALL: But how much real power will Labor be able to wield inside this coalition government?

ELI YERUSHALMI: I assume that Labor will be a very powerful. Don't forget that Labor still has 13
seats. There is a strong personal relationship between Netanyahu and Barak who know each other from
many, many years. Both of them were actually in the same unit in the army and they basically have
their focus and their opinions are very much the same on issues that face us today.

And don't forget that we need this kind of government, a broad government, in order to face the
challenges that Israel will be facing. The economy of course and the stress on Israel from
countries like Iran and Islamic fundamentalism.

ELEANOR HALL: Now Labor was initially adamant it would not join this coalition. What do you think
made it change its position?

ELI YERUSHALMI: The current situation of Israel is a very irregular situation. When you have a
normal situation, you can divide the country into right and left; whoever wins the election wins
the election.

But this time, all of us understand, whether we are on the right, left or centre of Israeli
politics that we are facing things that we have never seen in the past such as economy and the
threats to Israel and we need to be united to make sure that we are successful to face these

ELEANOR HALL: Now there is one major party that hasn't joined and that is Kadima. Tzipi Livni has
said that she's specifically not joining this coalition because Mr Netanyahu would not commit to
working towards Palestinian statehood.

ELI YERUSHALMI: Well, you know that Labor basically is even more left, you know than Kadima is; so
Netanyahu basically said that he is going to abide by all the agreements that we signed with the
Palestinians which include, of course, issues of two states and so on.

But we don't think in Israel that this is the major issue right now. The major issue is the economy
and threat to Israel from Islamic fundamentalism and Iran.

ELEANOR HALL: Coalition governments are, of course, inherently unstable. Is there a danger that one
so broadly based as this one will implode?

ELI YERUSHALMI: Well, I don't think so. Actually I think, you know, at this point in time in
Israel's history, personally I think that we need, you know, a wider coalition as possible and I
think the fact that you'll have included so many elements of Israeli politics means that the
government is simply going to be a stronger government. And I don't think the amount of ministers
is actually going to be larger than it was in the past.

ELEANOR HALL: Now the Labor leader Ehud Barak has said he doesn't want to be a mere fig leaf but is
the inclusion of Labor in this coalition likely to make it easier for Mr Netanyahu to deal with key
international leaders like the US president?

ELI YERUSHALMI: I assume so. Meaning both of them together in the same government will basically
enforce Israel's position especially vis-a-viz our friends and especially in this crucial time in
our history.

ELEANOR HALL: Was there a danger that without the inclusion of the Labor Party, a Netanyahu
government would have been, to some extent, shunned by key leaders in the international community?

ELI YERUSHALMI: I don't think so. You know every time there is a talk about, if the government
leans a little bit more to the right... don't forget that for many, many years we had the right wing
governments in Israel and in terms of our relations with the United States, Australia and friendly
countries, nothing really changed. The Likud Party, which is the main party of the Israeli right is
actually a very centrist party.

ELEANOR HALL: So how long do you think this government will last?

ELI YERUSHALMI: I hope it is going to last for the full four-and-a-half year duration of the
government. This is something of course, as you know very unusual in Israel. Usually the average of
our government lasting two to three years.

But actually I think this government has a good chance of lasting because it is going to face some
of the most critical issues we ever faced in our 60-year history.

ELEANOR HALL: And that is Eli Yerushalmi, the deputy chef de mission at the Israeli Embassy talking
about the new shape of the Israeli coalition government.