Prime Minister Binyamin Netanyahu
Prime Minister Binyamin NetanyahuMarc Israel Sellem/Flash90

Prime Minister Binyamin Netanyahu's coalition stressed its desire Wednesday to achieve peace with the Palestinians and other Arab states as he prepared to present his new government.

"The Jewish people have the indisputable right to a sovereign state in the Land of Israel, its national and historic homeland," read the coalition guidelines presented to parliament, AFP reported.

"The government will advance the diplomatic process and strive to reach a peace agreement with the Palestinians and all our neighbors, while maintaining Israel's security, historical and national interests," they read.

Any such agreement would be submitted the Knesset, for approval "and if necessary by law, to a referendum".

Netanyahu's new government is set to include ministers intent on expanding Jewish communities in Judea and Samaria, an issue for Palestinians who wish to declare a state in those areas. 

During campaigning for the March 17 election, Netanyahu ruled out the establishment of a Palestinian state if reelected.

Netanyahu has since sought to backtrack on those remarks and issued a public apology for warning on election day that Arab Israelis were going to the polls "in droves".

The rest of the government policy outline deals with issues such as reducing the cost of living, improving competition in the Israeli economy, boosting education and protecting the environment.

The guidelines are not inherently different to those published by Netanyahu for his two previous governments, formed in 2009 and 2013.

They were released as parliament was preparing to vote on legislation that would effectively enlarge the cabinet.

Netanyahu, who commands a razor-thin majority of just 61 of the Knesset's 120 seats, would then allocate ministerial and parliamentary positions to members of his Likud party, before presenting his government to parliament for approval.

Commentators expected the vote on the new government to take place on Thursday or Monday.