Many in the party bitterly opposed joining a Likud coalition
Israel's centre-left Labour party has narrowly voted to join a coalition government led by Benjamin Netanyahu of the right-wing Likud.
Labour leader Ehud Barak earlier reached a provisional deal with Mr Netanyahu amid divisions within his party over the coalition proposal.
The far right Yisrael Beiteinu and ultra-Orthodox Jewish party Shas have already agreed to join the coalition.
The centrist Kadima has so far refused to join over policy differences.
The BBC's Paul Wood reports from Jerusalem that Tuesday's vote means Mr Netanyahu can now form a government, one that might be more internationally acceptable with Labour than without.
He says this will help Mr Netanyahu, especially in Washington, where Israeli officials privately worry that they face the most sceptical administration in decades.
Mr Netanyahu has a deadline of 3 April to build his coalition government.
If he won support from all of Labour's MPs, he would command 66 seats in the 120-member Knesset, or parliament.
He wants to have Labour on board in order to calm widespread fears that a narrowly right-wing Israeli government could jeopardise renewed peace efforts with the Palestinians.
Labour's central committee backed joining the coalition by 680 to 507 votes.
Correspondents say the debate was stormy.
About half of the party's 13 lawmakers objected to Mr Netanyahu because of his long-standing opposition to peace efforts which Labour has backed, Haaretz newspaper reports.
Mr Netanyahu has refused to sign up to the two-state formula which has underpinned more than 15 years of Israeli-Palestinian peace efforts.
But Mr Barak told delegates: "I am not afraid of Benjamin Netanyahu.
"I won't serve as a fig leaf to anyone, and I won't be anyone's dead weight. We will be the counter-force that will prevent the formation of a narrow right-wing government."
Some delegates chanted "disgrace" as the result came in.
Mr Barak is defence minister in the current government and would retain the post in the next government, reports suggest.
Ehud Barak is defence minister in the current government
The risk for Mr Barak is that some Labour members will accuse him of putting personal ambition first and will opt to keep their principles unsullied by heading for the back benches in the Knesset, our correspondent says.
The question is whether this historic force in Israeli politics will be permanently split after this vote, he adds, something that could delay the formation of a new government.
Under the draft coalition agreement, Labour would get five cabinet posts and the government would commit to continuing negotiations with the Palestinians and to respecting previous deals made with them.
Army radio said the government would commit to working against unauthorised Jewish settlements in the West Bank.
A Likud member of the Knesset, Yuli-Yoel Edelstein, said there was general agreement between Likud and Labour on the main international challenges facing the incoming government.
"In terms of other issues like the peace process with the Palestinians, and probably other day-to-day issues, there will be an argument, but this is not what's going to bring the government down," he told the BBC.
"Because in practical terms, I don't think that either side really believes that it's possible to reach an agreement with the present Palestinian leadership in the near future."
Foreign Minister Tzipi Livni's Kadima party finished narrowly ahead of Likud in the election held on 10 February, gaining 28 seats to Likud's 27, but President Shimon Peres named Mr Netanyahu as the best placed to form the next government.
Ms Livni has ruled out joining a Likud coalition, saying Kadima would remain in opposition.
If Mr Netanyahu manages to form a coalition, analysts say it will mark a significant political comeback for the politician, who was prime minister in the 1990s.