In a surprise move, just hours after the Knesset approved the first reading of a bill to dissolve itself and hold elections, Prime Minister Binyamin Netanyahu and Opposition leader MK Shaul Mofaz announced they had reached an agreement to form a national unity government.

According to a report on Kol Yisrael radio, the Likud and Kadima parties converged at 2:00 a.m. (Israel time), and the members of both factions are being updated on the meetings between Netanyahu and Mofaz. It was also reported that Mofaz is expected to be appointed either a minister without portfolio or Homefront Defense Minister, a position recently vacated by MK Matan Vilnai (Independence).

It was also reported that the agreement reached between the Likud and Kadima calls for the Tal Law for the recruitment of hareidim into the army to be replaced by the end of July. Netanyahu and Mofaz will head a team which will be tasked with forming the new law.

In addition, Kadima has promised to remain in the coalition until the end of its term in November 2013. Also, it was agreed between the parties that by the end of December, a law changing the Israeli system of governemnt will be put to a vote. According to reports, the talks between Netanyahu and Mofaz went on for several days.

A unity government is likely to harm the Labor Party, which has gained strength in the polls, as well as Yair Lapid´s party, as he will now have to wait until the current Knesset completes its term in order to run.

A unity government would definitely help Kadima which, according to all polls, was set to suffer a dramatic blow in the next election.

Meretz chairwoman Zahava Gal-On called the unity government agreement a "dirty trick".

"The prime minister wants to avoid elections and the opposition leader is desperate and headed towards a crash," she said. "This is a disgrace to the Israeli parliament and a terrible message to the public, who is losing all faith in the country´s leadership."

MK Danny Danon announced that he opposes the move to establish a joint coalition with Kadima, and said he has approached Prime Minister Binyamin Netanyahu on the issue.

“The move will ensure that Barak remains as defense minister for another year and a half, and will drop the leftist party called known as Kadima into the government,” said Danon. “It will damage the settlement enterprise, hurt the values ​​of the Likud and will hurt the Israeli public who elected the Likud to lead Israel.”

He added, “We must not abandon the Likud’s natural partners. The move will give an oxygen tank to the political corpse called Kadima and will move the coalition from the right towards the center.”

Labor Party Chairwoman MK Shelly Yechimovich also condemned the newly formed unity government and called it “an alliance of cowards.”

In a message posted to her Facebook page, Yechimovich wrote, “This is the most ridiculous and ludicrous zigzag in the history of Israel. No one will forget this dirty deal, which will, unfortunately, deeply hurt the public´s trust in politics. In light of the final burial of Kadima, we have been given a rare and important opportunity to lead to the opposition, and we will do this with energy and faith. The 2013 budget led by Netanyahu and Kadima´s corpse will be a difficult budget for the citizens of Israel, and we will fight it.”

With Kadima joining the coalition, Labor will become the largest party in the opposition and as such Yechimovich will become leader of the opposition. However, with Kadima´s 28 seats, the opposition will consist of only 26 MKs.

Interior Minister and Shas chairman Eli Yishai welcomed the agreement. (IsraelNationalNews © 2012 05/08/12)