Prime Minister Binyamin Netanyahu called President Shimon Peres - who was on a trip to Canada - to update him on the deal he struck with Shaul Mofaz late Monday night to form a unity government.

The president gave the deal his blessing, saying a national unity government is good for the the nation and its well-being given the difficult challenges Israel faces.

The agreement was announced just before a bill to dissolve the 18th Knesset was headed to a final vote in the plenum.

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