Israel vows 'swift' border work

Ehud Olmert (left) signed up Labour leader Amir Peretz on Thursday

The incoming Israeli government will meet swiftly to draw Israel's final borders, according to the guidelines of a new coalition agreement.

Withdrawal from parts of the West Bank and construction of a huge separation barrier will also be prioritised.

The Kadima Party signed the accord with the Labour Party on Thursday.

However, a coalition with Labour and the Pensioners Party leaves interim PM Ehud Olmert short of the parliamentary majority he needs to realise his plan.

Mr Olmert wants to set permanent borders for Israel by 2010.

BBC correspondent Katya Adler says the plan involves removing dozens of Jewish settlements from the occupied West Bank while keeping others.

If he succeeds, tens of thousands of Jewish settlers will lose their homes and large areas of occupied Palestinian land will be annexed.

Mr Olmert will need international support and a powerful coalition in the 120-seat parliament to push through his plan, our correspondent says.

'Rocky road ahead'

Labour, which came second in the general election in March, is expected to get seven cabinet posts, with Labour leader Amir Peretz likely to serve as defence minister.

COALITION (revised 27 April) Kadima: 29 seats, centrist Labour: 19 seats, centre-left Pensioners: 7 seats, single-issue Possible partners: Shas: 12 seats, ultra-Orthodox Torah Judaism: 6 seats, ultra-Orthodox Meretz: 5 seats, left-wing

However, negotiations between Israel's two largest political groups went on for almost a month after differences emerged over economic issues and the division of cabinet portfolios.

Correspondents say the partnership could become rocky over two key issues. The economy - Kadima tends to the centre right and Labour to the centre left - and relations with the Palestinians regarding the future security of Israel.

Both parties agree that Israel must give up land to fix its final borders. But while Kadima favours unilateral action, Labour is open to talks with Palestinian President Mahmoud Abbas on the issue, our correspondent says.

With the Pensioners Party and Labour on board, Mr Olmert controls 55 seats - six seats short of a workable majority.

He is seeking to form a broad coalition with more than 80 seats. Talks with other parties are continuing, with Kadima expected to reach a deal with the ultra-Orthodox Shas party.