Prime Minister Binyamin Netanyahu told the Likud faction late Monday night that contact with opposition leader Shaul Mofaz over forming a unity government began a few days ago and bore fruit.
Now, according to the deal, Kadima has agreed not to topple the government until the official end of its term on October 22 2013.
Kadima will lead a committee that will work on approving an alternative to the Tal Law - which allows ultra-Orthodox men to indefinitely defer army service - by the August 1 deadline.
The party will also be tasked with changing the government system by the end of the year.
Jpost.com staff contributed to this report