Prime Minister-designate Binyamin Netanyahu's efforts to build a government suffered two key setbacks on Monday when it became clear that Kadima would not be joining the coalition and marathon talks with Shas failed to yield a deal. Likud and Shas negotiating teams met for nearly 12 hours at Ramat Gan's Kfar Hamaccabiah Hotel and discussed socioeconomic issues, such as the budget for yeshiva students. United Torah Judaism MKs joined the meeting later on. The Likud's failure to reach a deal with its second-largest coalition partner made it increasingly likely Netanyahu would not succeed in his goal of having his ministers sworn in this week. Coalition deals must be submitted to the Knesset 24 hours before ministers can be sworn in. The deadline for Netanyahu to form a government without asking President Shimon Peres for a two-week extension is Friday, but the Knesset does not meet on Fridays, even to swear in ministers. One possibility remaining is that Netanyahu will submit the deals by Friday and the ministers will be sworn in on Monday. The key to reaching a deal with UTJ is the party's rabbis agreeing to compromises reached between Israel Beiteinu and Shas on civil unions for couples seeking to be legally recognized without a religious ceremony in order to receive state benefits. Israel Beiteinu leader Avigdor Lieberman met recently on the matter with Sephardi Chief Rabbi Shlomo Amar, who is close to Shas mentor Rabbi Ovadia Yosef, and with top Ashkenazi rabbinical figures. The Likud met after midnight Sunday with Habayit Hayehudi, but failed to reach a deal on budgetary issues. It was still unclear on Monday whether the National Union would be joining the coalition. One party that will almost definitely remain outside the coalition is Kadima, after informal talks with the party broke down. Party officials said they were upset that the coalition deal the Likud signed with Israel Beiteinu early Monday did not mention a Palestinian state. "It is unlikely that there will be enough of a positive dynamic to develop the necessary momentum in the remaining few days," said a Kadima source involved in the negotiations. "The talks have been going on constantly but the agreement with Israel Beiteinu makes it very unlikely that we will join." Kadima leader Tzipi Livni told the Kadima faction the party would not join a government that would not push for a two-state solution or changes to the system of government. She said she had talked to Netanyahu over the past week about forming coalition guidelines together and then having other parties join but he instead worked to form a government of 61 MKs and then expected her to join it. "A national-unity government is made up of two parties that have the support of most of the public and who build a basis for a joint path together on an equal basis," Livni said. "Joining the coalition as a fig-leaf to a pre-existent government of 61 MKs to strengthen a path that is not ours is certainly not the right thing to do." Channel 10 revealed that Netanyahu met secretly with Labor chairman Ehud Barak on Sunday night about joining the coalition. But Barak's associates downplayed the meeting and said that if Kadima did not join the coalition, neither would Labor. Netanyahu met on Monday with President Shimon Peres and updated him on his talks with Livni and Barak and the status of the coalition negotiations. A source close to Netanyahu said he had not given up hope that a national-unity government would still be formed. "You can never say never," the source said. "Netanyahu has done all he could to find [the] common ground with Livni that we know is there. And we still hope she will come around and make a decision that's right for the country."