Israel's ruling Likud party has closed a deal with the opposition Labor party to form a unity government.
Under the agreement, Labor leader Shimon Peres will become second-in-command to Prime Minister Ariel Sharon. Both Mr. Peres and Likud Minister Ehud Olmert will share the title of vice premier in the new government, which could be announced as early as next week.
Coalition talks began after some Likud members quit the Sharon government to protest Israel's planned withdrawal from the Gaza Strip.
In a separate development, witnesses say four Palestinians have been killed in an Israeli air strike Thursday night in the southern Gaza Strip. This brings to nine the number of Palestinians killed since an Israeli incursion began Wednesday night in the Khan Younis refugee camp.
Some information for this report provided by AFP and AP.