Kadima and Labor negotiating teams are scheduled to meet Friday in a bid by Prime Minister-designate Foreign Minister Tzipi Livni to form a new government coalition. Both sides reported that progress is being made, but no agreement is expected before next week.

Even if Labor agrees to a new coalition government, Shas remains the big question mark for Livni, who has not publicly responded to Shas demands that she retain Jerusalem as Israel's undivided capital and that economic assistance be provided for large families. Without Shas joining the coalition and providing her with a majority of MKs, she faces the likelihood of elections.