JERUSALEM (Reuters) – Israeli Prime Minister Benjamin Netanyahu formed a unity government on Tuesday in a surprise move that could give him a freer hand to attack Iran’s nuclear facilities and seek peace with the Palestinians.

The coalition deal, negotiated secretly over the past days and sealed at a private meeting overnight, means the centrist Kadima party will join Netanyahu’s rightist coalition, creating a majority with 94 of parliament’s 120 seats.

The alliance, which replaces plans announced just two days earlier for a snap election in September, will be one of the biggest in Israel’s history – though an opinion poll found only 39 percent of Israelis supported it and 34 percent were opposed.

“This government is good for security, good for the economy and good for the people of Israel,” Netanyahu told a joint news conference with Kadima leader Shaul Mofaz, a former defense chief who began secret talks on a deal last week.

The new coalition would, Netanyahu said, focus on redrafting the budget, on electoral reform and on what he called sharing out military duties across the population – his religious coalition partners had unsettled the government by opposing plans to end exemptions from the draft for ultra-Orthodox Jews.

Among other goals of the new government would, the prime minister said, be “to try to advance a responsible peace process” with the Palestinians: “Not all has been agreed but we have a very strong basis for continued action,” he said, urging Palestinians to “come sit with us for serious negotiations”.

Asked how the new alliance would address Israel’s concern that Iran is secretly developing nuclear weapons, Netanyahu replied: “Of course one of the important issues is Iran.”

JERUSALEM (Reuters) – A quiet word from a visitor paying a condolence call to Benjamin Netanyahu may have been the seed that sprouted into a surprise Israeli unity government deal.

Last week, the prime minister was sitting “shiva” a seven-day Jewish period of mourning, for his 102-year-old father, when Shaul Mofaz, head of the centrist Kadima party, came to Netanyahu’s Jerusalem apartment to express his sympathies.

After a handshake, the muted conversation between the political rivals touched on the possibility of a governing partnership, said a legislator privy to details of the coalition-building contacts.

“It’s not that they were talking politics,” said the lawmaker. But he said Mofaz and Netanyahu, leader of the right-wing Likud party, exchanged a relevant word or two — “and last night, it was done”.

Israelis had gone to bed Monday night certain that parliament, at Netanyahu’s request, would vote to dissolve itself and schedule a new general election on September 4, more than a year ahead of time.

But while deputies debated the motion in a curiously drawn-out overnight session, behind the scenes, Netanyahu and Mofaz concluded an agreement to form a government of national unity that will control 94 of parliament’s 120 seats.

All but a select few Kadima and Likud legislators were kept out of the loop. One Mofaz ally, Kadima lawmaker Otniel Schneller, told Reuters: “I was totally taken by surprise.”

JERUSALEM (Reuters) – Israel’s parliament convened on Monday to dissolve itself and set a September 4 election that opinion polls predict will renew Benjamin Netanyahu’s leadership mandate as Israel confronts Iran’s nuclear ambitions.

The looming ballot has deepened doubts about the right-wing prime minister’s threats to attack Iran and raised the question of whether his window of opportunity is now too narrow.

“My intention is to form as wide a coalition as possible in order to bring about stability and lead Israel in the face of the great challenges still ahead of us,” Netanyahu told his cabinet earlier in public remarks.

The next national election was not due until October 2013, but new legislation that might force ultra-Orthodox Jews to serve in the military and an upcoming budget debate have threatened to unravel a governing coalition of religious and nationalist parties.

Israeli leaders have insisted the election campaign would have no impact on their decision-making with regard to Iran, which includes the possibility of launching an Israeli strike against its nuclear installations.

A Netanyahu victory two months before the U.S. election could give him leverage over Barack Obama on the Iranian and Palestinian issues while the president is still engaged in his own campaign and wary of alienating pro-Israel U.S. voters.

“During this interim the new Israeli government will have absolute authority, while the U.S. administration will be impotent,” said Ari Shavit, a columnist for the liberal Haaretz daily.

JERUSALEM (Reuters) – Prime Minister Benjamin Netanyahu called on Monday for an early general election on September 4, a vote opinion polls say will renew his leadership mandate as Israel confronts Iran’s nuclear ambitions.

“My intention is to form as wide a coalition as possible in order to bring about stability and lead Israel in the face of the great challenges still ahead of us,” Netanyahu told his cabinet in public remarks.

The next national vote was not due until October 2013, but new legislation that might force ultra-Orthodox Jews to serve in the military and an upcoming budget debate have threatened to unravel a governing coalition of religious and nationalist parties once seen as one of the most stable in Israel’s history.

“We are in a country that needs political stability. I would be very happy if we could complete our term and that was my goal, too,” Netanyahu said.

“Regretfully this instability has put a question mark on this and so I think the right thing to do is to go for a short election. We propose September 4, and afterward, God willing, the voters will give us a mandate.”

On Sunday, Netanyahu said in a speech to a convention of his right-wing Likud party that he would seek an early vote in four months’ time but did not disclose an exact date.

Israeli leaders have insisted the election campaign would have no impact on their decision-making with regard to Iran, which includes the possibility of launching an Israeli strike against its nuclear installations.

JERUSALEM (Reuters) – Prime Minister Benjamin Netanyahu is expected to announce on Sunday an early general election on September 4, a spokesman for his Likud party said, a ballot likely to strengthen his hand as Israel confronts Iran’s nuclear ambitions.

The next national vote was not due until October 2013, but new legislation that might force ultra-Orthodox Jews to serve in the military and an upcoming budget debate have threatened to unravel a governing coalition of religious and nationalist parties once seen as one of the most stable in Israel’s history.

A Netanyahu victory, two months before the U.S. election, is widely seen in Israel as giving him a measure of leverage over Barack Obama on the Iranian and Palestinian issues while the U.S. president is still engaged in his own race and wary of alienating pro-Israeli voters.

Netanyahu and Obama have had a thorny relationship and the right-wing Israeli leader has come under pressure from Washington not to take unilateral military action against Iran’s uranium enrichment facilities.

The Likud spokesman said Netanyahu was expected to tell a party convention later in the day that he would ask parliament to dissolve and set a September 4 election date.

Opinion polls show Likud will easily come out on top of the national ballot, giving Netanyahu a renewed mandate to tackle what he has described as the most important challenge facing his country – the prospect of a nuclear-armed Iran.

Parliament was due to convene on Monday and vote on a coalition-backed resolution of dissolution. Netanyahu and his government would remain in office until a new administration is sworn in after the election in four months’ time.

JERUSALEM (Reuters) – Israeli Prime Minister Benjamin Netanyahu dropped heavy hints on Sunday of an early election, shifting the national focus from a former spymaster’s accusations that he could start a rash war with Iran.

The next general election in Israel is not due until October 2013, but a new conscription law that might force ultra-Orthodox Jews to serve in the army and an upcoming budget debate could crack open his coalition of religious and nationalist parties.

With opinion polls showing the right-wing leader on track to win another term if an election was held now, speculation has been ripe that Netanyahu will opt to bring the ballot forward.

Meeting with cabinet ministers from his Likud party on Sunday, Netanyahu signaled he was considering an early vote, after having insisted publicly that he would wait until 2013.

“The prime minister said that he’ll be speaking to coalition leaders in the next week or two about the date of an election,” said a government official who attended the meeting.

“Nothing has been decided, but he wants to see what the political reality is.”

Israeli media swiftly shifted gears, moving from the allegations against Netanyahu leveled by Yuval Diskin, ex-chief of the Shin Bet domestic security service, to talk of an election as early as August.

JERUSALEM (Reuters) – Israel’s military chief said he does not believe Iran will decide to build an atomic bomb and called its leaders “very rational” – comments that clashed with Prime Minister Benjamin Netanyahu’s assessment.

Lieutenant-General Benny Gantz’s remarks, in an interview published on Wednesday in the left-wing Haaretz newspaper, drew little attention in Israel on its annual remembrance day for fallen soldiers, when political discourse is suspended.

But they will add fuel to an internal debate on the prospects of Iran weaponizing its uranium enrichment program and the wisdom and risks of any Israeli military strike to try to prevent Tehran from becoming a nuclear power.

“Iran is moving step-by-step towards a point where it will be able to decide if it wants to make a nuclear bomb. It has not decided yet whether to go the extra mile,” Gantz said.

But, he said, Iranian Supreme Leader Ayatollah Ali Khamenei could opt to produce nuclear weapons should be believe that Iran would not face reprisal.

“In my opinion, he will be making a huge mistake if he does that and I don’t think he will want to go the extra mile,” Gantz said.

“I think the Iranian leadership is comprised of very rational people. But I agree that such a capability in the hands of Islamic fundamentalists, who at some moments may make different calculations, is a dangerous thing.”

JERUSALEM (Reuters) – Israeli Prime Minister Benjamin Netanyahu voiced support on Tuesday for the first time for Palestinians to establish a contiguous state, saying their future country should not look like “Swiss cheese”.

But only hours earlier, a ministerial committee in his right-wing government granted Israeli legal status to three previously unauthorized Jewish settlement outposts in the occupied West Bank, drawing Palestinian and international criticism.

Palestinians fear such outposts and the 130 formal settlements Israel has built in the territory it captured in a 1967 war will deny them a viable state.

Asked on CNN’s Erin Burnett Outfront program whether he would accept the Palestinians’ belief they should have a country that is contiguous, Netanyahu replied: “Yes.”

“Not as a Swiss cheese? No,” Netanyahu added, addressing a key Palestinian concern, that the state they seek would be comprised of pockets of villages and towns surrounded by Israeli settlements.

Netanyahu previously has said Israel would be “generous about the size” of a future Palestinian state, but he has not echoed U.S. President Barack Obama’s call for a contiguous country to emerge from Middle East peace talks – frozen since 2010 over the settlement issue

His change of tone on the nature of a Palestinian state came a week after he received a letter from Palestinian President Mahmoud Abbas that repeated a call for an end to all settlement activity and put the onus on Israel to take action to get peace talks moving again.

JERUSALEM (Reuters) – Israel said on Tuesday it had granted legal status to three settlement outposts in the occupied West Bank, a move that could shore up the governing coalition but which drew sharp Palestinian and European criticism.

Israeli officials played down the decision taken by a ministerial committee late on Monday, rejecting accusations that the government had effectively created the first new Jewish settlements for more than 20 years.

The three outposts – Bruchin, Sansana and Rechelim – were built on land Israel declared “state-owned” in the West Bank, an area it captured in the 1967 war and which Palestinians want as part of a future state.

“The panel decided to formalize the status of the three communities … which were established in the 1990s following the decisions of past governments,” said a statement issued by Prime Minister Benjamin Netanyahu’s office.

Most of the international community views all Jewish settlements in the West Bank as illegal. However, Israel distinguishes between settlements it has approved and the outposts which were never granted official authorization.

Some 350 settlers live in Bruchin and 240 in Rechelim, both in the northern part of the West Bank, while Sansana, with a population of 240, lies further to the south.

None of the outposts had been granted final Israeli legal status as formal communities.

JERUSALEM (Reuters) – Israel said on Tuesday it had granted legal status to three settlement outposts in the occupied West Bank, a move that could shore up the governing coalition but which drew sharp Palestinian condemnation.

Israeli officials played down the decision taken by a ministerial committee late on Monday and rejected accusations that the government had effectively created the first new Jewish settlements for more than 20 years.

The three outposts — Bruchin, Sansana and Rechelim — were built on land Israel declared “state-owned” in the West Bank, an area it captured in the 1967 war and which Palestinians want as part of a future state.

“The panel decided to formalize the status of the three communities … which were established in the 1990s following the decisions of past governments,” said a statement issued by Prime Minister Benjamin Netanyahu’s office.

Most of the international community views all Jewish settlements in the West Bank as illegal. However, Israel distinguishes between settlements it has approved and the outposts which were never granted official authorization.

Some 350 settlers live in Bruchin and 240 in Rechelim, both in the northern part of the West Bank, while Sansana, with a population of 240, lies further to the south.

None has been granted final Israeli legal status as formal communities and Netanyahu, though politically strong, has faced questions from within his own Likud party and other right-wing coalition partners about his commitment to settlers.