Shas became the second party to join prime minister-designate Binyamin Netanyahu's government on Sunday, signing a deal after 11pm.
Netanyahu now has a coalition of 53 MKs in hand from Likud, Israel Beiteinu and Shas. Coalition talks will continue on Monday with Labor, United Torah Judaism and Habayit Hayehudi.
The deal with Shas guarantees the party the Interior, Construction and Housing and Religious Services portfolios. The party gave up its attempt to appoint a minister for haredi education and instead will receive a minister-without-portfolio in the Prime Minister's Office. The party will also have a deputy minister in the Finance Ministry.
Eearlier Sunday, Prime Minister Ehud Olmert slammed the possible political alliance between Netanyahu and Labor chairman Ehud Barak in Sunday's cabinet meeting, saying that anyone not working off the premise of two states for two peoples was "deluding themselves and the public."
Olmert said that if the new government did not actively pursue the formation of a Palestinian state, it would lead to international isolation and an unprecedented diplomatic crisis. He asked how it would be possible to work productively with the international community on other issues, such as Iran, and not accept the international consensus of the need for a two state solution.
"History will not forgive those who know the truth in their hearts but ignore it for foreign considerations that have nothing to do with the good of the country," Olmert told the cabinet.
When Barak entered the room, Olmert said he was not referring to anyone personally. But it was clear to the ministers that he had been talking about Barak, who he has loathed since he forced his resignation from the premiership six months ago.
The Likud expressed outrage at Olmert for interfering with Netanyahu's efforts to form a
national-unity government with Labor by the April 5 deadline. Netanyahu's associates expressed confidence that the coalition would be finalized next week.
"Olmert's hatred for Barak has made him go insane," a senior Likud source said. "He cares
more about preventing Barak from remaining defense minister than about what is good for the country, which is a national-unity government as soon as possible."
Barak's office accused Olmert of a "pathetic attempt to harm the defense minister in any way possible and at any price" and called upon Olmert to "leave quietly." Sources close to Barak expressed outrage at Olmert for trying to persuade Welfare and Social Services Minister Isaac Herzog not to support Labor joining the government.
Herzog's office confirmed a report by Channel 1's Ayala Hasson that Olmert spoke to Herzog outside the cabinet meeting and told him not to back Barak's effort to bring Labor into Netanyahu's government. Herzog, who is Barak's No. 2 in Labor, remains undecided and his decision is key ahead of Tuesday's decisive party convention.
In a lengthy meeting with Barak on Sunday, Herzog told him that since the election, he has leaned toward entering the opposition. He issued a series of demands on socioeconomic and diplomatic issues and requested in-depth answers in the coalition agreement that Labor and Likud would draft.