With the Kadima party in his coalition, Prime Minister Benjamin Netanyahu can pursue a more moderate path on issues such as peace talks and Iran, analysts say.

JERUSALEM — The surprise unity government announced Tuesday by Israeli Prime Minister Benjamin Netanyahu has many observers predicting that the reformed coalition will embark on a more moderate path, including reopening talks with Palestinians and softening rhetoric on attacking Iran.

The addition of the centrist Kadima party to what has been called one of Israel´s most right-wing coalition governments gives Netanyahu a comfortable 78% majority in the parliament, lessening the clout of small right-wing parties and factions.

Those parties, including Foreign Minister Avigdor Lieberman´s nationalist Yisrael Beiteinu and the ultra-Orthodox Shas, have dominated the government agenda for three years, pushing to expand West Bank settlements, fighting efforts to demolish unauthorized outposts and passing laws that Arab Israelis say restrict their civil rights.

Some Israeli politicians predict that the hastily arranged deal will give Netanyahu the breathing space he needs to pursue more moderate policies, which those close to him say reflect his personal views. They say he has been unable to pursue them out of fear the issues would break apart his coalition.

"This gives Netanyahu more liberty," said Zalman Shoval, a foreign policy advisor for the prime minister´s Likud Party and former ambassador to the U.S. "He´s basically a centrist."

At a news conference Tuesday, Netanyahu said the new coalition will enable him to tackle pressing issues, including pursuing a "responsible peace process." Kadima Chairman Shaul Mofaz vowed to "change the agenda."

Israel´s right-wing politicians expressed alarm. Lawmaker Danny Danon, who leads a conservative faction within Likud, expressed fear that Netanyahu will move to freeze settlement construction in the West Bank, a key Palestinian demand for restarting peace talks.

"This is going to push the government to the center and to the left, and I am going to lead the effort to make sure the government maintains the values of the nationalist camp," he said, adding that settlers "are very worried about this arrangement and fear the government will not support them."

But Danon also predicted that Kadima would quit the unity government as soon as the centrist party rebuilds some of its popularity. Recent polls showed that Kadima would have lost half its seats if early elections announced by Netanyahu on Sunday were held Sept. 4. The coalition deal pushes elections back to next year.

Mofaz, who for weeks had denounced Netanyahu´s leadership and repeatedly sworn that he would not join the government, defended the deal Tuesday. He said joining the government will give him a platform to push for renewed Palestinian peace talks and a law drafting ultra- Orthodox young people into the military, something opposed by religious parties but popular among Israeli voters.

The Kadima leader, who is expected to serve in Israel´s powerful security Cabinet, may also put the brakes on Netanyahu´s public threats to attack Iran´s nuclear program. In recent television interviews, Mofaz said the U.S. should lead any military strike, and criticized Netanyahu for "inflating" the immediate threat posed by Iran.

However, analysts said that a unity government would provide Netanyahu with broader domestic support should he decide to strike Iran.

David Makovsky, a veteran Mideast analyst at the Washington Institute for Near East Policy, noted that Mofaz previously was more accepting of the idea of military action against Tehran. Should Netanyahu and Defense Minister Ehud Barak decide they want to bomb the nuclear installations, "it´s not clear he´ll be the most vehement opponent," Makovsky said.

The deal benefits both Netanyahu and Mofaz, Makovsky said. The prime minister avoids the distractions of an election this year, neutralizes the political threat from the moderate Mofaz and addresses the issue of his dependence on right-wing coalition partners hurting Israel when it comes to foreign governments, including the United States. For Mofaz, whose bloc has been relatively small, the agreement grants "him and his party a new lease on life," the analyst said.

Some experts cautioned that the jury is out on whether the unity government will set Netanyahu on a more moderate course, even though President Obama and other global leaders might pressure him to move in that direction. In recent years, many close to the prime minister have predicted he would make a bold political shift, only to be disappointed when Netanyahu remained loyal to his right-wing supporters.

"It´s by no means clear that he wants to do so," editor David Horovitz wrote Tuesday in the Times of Israel, an Internet-based newspaper. "But he has room for maneuver now if he wishes to use it. And the Americans and the rest of the international community will be well aware of the fact."

A key point of friction between Netanyahu and Obama has been Israel´s refusal to halt settlement construction and make concessions designed to bring Palestinians back to the negotiating table. Netanyahu supporters had argued that the prime minister would be open to such moves but his more right-wing supporters would not permit it.

Answers should be more clear in coming months as the coalition faces several challenges, including the looming court-ordered eviction of several unauthorized West Bank settlements, the expiration in July of a law exempting religious students from the draft and adoption of a new budget.

Palestinian leaders reacted with skepticism. They have long maintained that, despite the rhetoric, there is little difference between Israel´s rival parties on the issues of settlement construction and peace talks.

While in the opposition, Mofaz called for the creation of an interim Palestinian state on 60% of the land in the West Bank. The plan was rejected by Palestinians.

Palestinian Authority spokesman Nabil abu Rudaineh on Tuesday called on Israel "to use the opportunity of the expansion in the government coalition to speed up efforts to reach a peace agreement."

The resurgent Labor Party could be a short-term loser in the unity deal because polls predicted it would have become Israel´s second- biggest party in the Knesset, or parliament, after the now-canceled September elections.

But it also raises the profile of Labor Chairwoman Shelly Yachimovich, who takes over as the opposition leader. She said Tuesday that the new coalition put political interests above ideology and predicted it would be a boon to her party´s ability to present itself as an alternative.

The deal, she said dismissively, was "the most ridiculous zigzag in Israel´s political history." Times staff writer Paul Richter in Washington contributed to this report. (Copyright © 2012 Los Angeles Times 05/09/12)