Wednesday, June 16, 1999 Published at 14:58 GMT 15:58 UK
World: Middle East
Israel poised for coalition
Mr Barak has just three weeks to form a government
Israel's political vacuum came closer to being filled by a new coalition government after the resignation of the controversial leader of Shas, the ultra-orthodox party.
Without Shas support in the Knesset, Mr Barak was struggling to form a government by the legal deadline of 8 July.
He is aiming for a 77- seat majority in the 120-seat parliament, made up of
Mr Barak had demanded Mr Deri's resignation as a pre-condition for Shas to join the governing coalition. Mr Deri was convicted of stealing public funds earlier this year.
The resignation of one of the most prominent figures in Israeli politics ends a month-long political battle of wills.
Shortly after the May 17 elections, Mr Deri announced that he would not take up his seat in the 120-member Knesset, but he stopped short of resigning as Shas leader.
His resignation is to be approved at a meeting of the council of rabbis who form the Shas spiritual leadership.
The BBC's correspondent Hilary Andersson says the party clearly wants to join a new government, and now there is a greater chance that this could happen.
Notwithstanding the fundamental policy differences between Mr Barak's party and its potential coalition partners, the prime-minister elect still has much work to do, say correspondents.
The left-wing Meretz Party, a natural coalition partner for the strongly secular Shinui Party both say they will not sit in a government with the ultra-orthodox party.
Although Shas takes a moderate view on the peace process, left-wing parties object to its views on the role of religion and the state.