Attorneys for Likud and Yisrael Beytenu met late Monday night in an effort to finalize a draft of a coalition agreement after apparently resolving a crisis over pensions for veteran immigrants and other disadvantaged elderly people.The progress in the coalition talks came after a day in which Yisrael Beytenu leader Avigdor Liberman and Finance Minister Moshe Kahlon (Kulanu) each delivered vigorous addresses to the press in which they vowed not to compromise. Prime Minister Benjamin Netanyahu downplayed the impasse and said it would be resolved.“There are negotiations, which have ups and downs,” Netanyahu told the Likud faction.“I’ve conducted countless processes of negotiations. It takes an effort, and there are always crises and blow-ups. They always say everything is collapsing, but the truth is that nothing is collapsing. It just takes time. Don’t lose hope.”Netanyahu met with Kahlon and Liberman in an effort to settle the dispute, which led to the apparent breakthrough and the meeting of Likud attorney David Shimron and Yisrael Beytenu’s Leon Litenetsky. Earlier, both sides had drawn lines in the sand.“We compromised on matters of religion and state and the death penalty,” Liberman told his faction. “We said we wouldn’t compromise on two basic issues: The defense portfolio and pension reform. We said all along that it was a pension reform for everyone, not just immigrants from Russia as it is being presented [by Kahlon.] Unfortunately, the answers we have gotten from the Finance Ministry have been unsatisfactory. This gives me a bad feeling. We are at a dead end. We’re waiting to get a new offer.”As part of the negotiation, Liberman tried to expand pension benefits to immigrants from the former Soviet Union (certain benefits accrue based on the number of years lived in Israel and the number of years worked, which excludes some Soviet immigrants who are now retired.) Kahlon, however, wanted to ensure that any pension increases would apply across the board to the nation’s elderly, needy population, not just immigrants. According to media reports, Ze’ev Elkin had proposed a flat NIS 2,300 retirement supplement, but the Finance Ministry balked over the NIS 2.5 billion price tag. Russian activists also noted that there was a NIS 3,000 cap on supplements, so many people would only see a minimal increase in welfare.Liberman was pushing for a NIS 500 monthly welfare increase that would help 230,000 elderly people at a cost of NIS 1.9b. a year, though the Treasury was willing to offer only NIS 300, and wanted to spread the increase over several years.On Monday afternoon, Kahlon went public with his proposal of a NIS 1.3b.-NIS1.4b. plan (including an already-planned NIS 350 million pension supplement increase.) “The proposal we offered Yisrael Beytenu is exceedingly fair,” Kahlon told his faction. “It does not discriminate, it’s not sectoral, and it applies to the entire public.”Further complicating matters, Bayit Yehudi chairman Naftali Bennett also raised a demand in return for his party’s support for the deal, calling on Netanyahu to fix what he said were problems within the security cabinet in order to count on his party’s eight votes in the plenum vote.Bennett said his call came “in light of the lessons learned from Operation Protective Edge and the Second Lebanon War in which cabinet members did not share quality intelligence and weren’t properly trained for their roles when tested with the responsibility for the army.”The Bayit Yehudi leader said his plans include, among other things, appointing a military secretary to the cabinet, who will be in charge of security updates, as well as preparing the cabinet to perform their duties through increased trips into the field and granting easier ministerial access to information.“Fixing the cabinet’s defects is a must for the security of Israel and for guarding the lives of citizens and IDF soldiers. In the Second Lebanon War and Operation Protective Edge, Israel paid the expensive price for these defects,” Bennett said.The Likud responded that it was “not reopening coalition negotiations with any party, including Bayit Yehudi.”Likud minister Yariv Levin said the message from Bayit Yehudi hurts the ability to complete the expansion of the national government, and that he expected Bennett “to act with the responsibility that is expected of him.”Bayit Yehudi remained adamant, however, later stating that it had unanimously approved Bennett’s proposal to amend the defects of the cabinet that served during the 2014 war in Gaza.Laura Sigal and Zack Pyzer contributed to this report.