Israeli Defence Minister Ehud Barak has said he will not quit Prime Minister Ehud Olmert's government over its handling of the 2006 Lebanon war.
Mr Olmert could have faced elections if Mr Barak had quit
His decision comes after an official inquiry called the war a failure, but spared Mr Olmert serious criticism.
Mr Barak had threatened - depending on the report's findings - to demand Mr Olmert's resignation or early polls.
If Mr Barak had pulled Labor's 19 members from the coalition, Mr Olmert looked set to face new elections.
"Why am I staying? I'm staying in the post of defence minister because I know what kind of challenges face Israel," Mr Barak told reporters, before entering Sunday's weekly Cabinet meeting.
Correspondents say the decision by Mr Barak - who joined the government coalition about a year after the Lebanon war - removes for now any threat to Mr Olmert's government.
The war was widely regarded by the Israeli public as a failure
The prime minister insisted he would not step down last Wednesday after the publication of the government-appointed Winograd inquiry.
Although the report did not blame Mr Olmert directly, it found the 34-day war against Hezbollah had been a "large and serious" failure.
The conflict broke out in July 2006, when Hezbollah fighters captured two Israeli soldiers and killed three others in a cross border raid.
If Mr Barak had quit, Mr Olmert's coalition would have been left short of the 61 MPs needed for a majority in the 120-member Knesset (Israeli parliament).
The defence minister's decision to remain in government may have been influenced by Labor's opinion poll ratings, say analysts.