Coalition negotiations between Prime Minister Benjamin Netanyahu and Yisrael Beytenu chair Avigdor Liberman were almost completed after Netanyahu agreed to the condition of setting the death penalty for those who commit terror activities. Members from both parties exchanged a final draft of the agreement on Thursday agreeing on the death penalty, however both have not agreed on the specific conditions. In a meeting that lasted less than an hour Wednesday afternoon, Liberman accepted Netanyahu’s offer of the defense and immigration and absorption portfolios and support for key Yisrael Beytenu-sponsored legislation.Netanyahu updated Defense Minister Moshe Ya’alon immediately after meeting with Liberman. A source close to Netanyahu said Ya’alon is likely to be compensated by becoming foreign minister, but Ya’alon’s office said he had not yet been offered the post.Talks with Yisrael Beytenu began after negotiations with the Zionist Union failed to progress.Netanyahu met with Herzog until 1 a.m. late Tuesday night but failed to reach agreements on diplomatic issues.In a Tel Aviv press conference, Herzog blamed the failure to reach a deal on Netanyahu refusing to write down his commitments on diplomatic issues. The Palestinian Authority issued a press statement on Thursday saying that Avigdor Liberman joining the Israeli government demonstrates that Israel favors extremism and reinforcement of occupation and settlements over peace."The appointment of Liberman to serve as a minister in Netanyahu's government is an answer to the regional, international and French efforts to reinvigorate the Israeli-Palestinian peace process," the statement read.Gil Hoffman contributed to this report.