Prime Minister-designate and Kadima party Chairman Ehud Olmert and Labor Party Chairman Amir Peretz have ended their negotiations, and their coalition deal is expected to be signed tonight.



Labor will receive seven ministerial posts, but Peretz will have the unenviable task on Sunday of convincing his party colleagues to accept his recommendations for the positions. He prefers party veterans Herzog, Cabel, Ben-Eliezer and Pines over new Labor MKs Ami Ayalon and Avishai Braverman.



Olmert cut out deputy minister posts in order to reduce the size of the government. The decision was disappointing for Knesset Member Ephraim Sneh of Labor, who was to be tapped for the job of Deputy Defense Minister. Sneh had served in that position in two prior governments. Labor leaders expressed dissatisfaction that Peretz gave in to Kadima on this point.



In addition to the portfolios already agreed upon by Peretz and Olmert, Labor will also receive Knesset chairmanships of the Education and the Internal Affairs committees.



The two parties also came to an agreement on the evacuation of illegal outposts. In accordance with Labor's demand, the guidelines will state that the government will evacuate illegal outposts in Judea and Samaria.



Raising the minimum wage, another major sticking point at the beginning of the talks, is to be carried out in small increments over a period of several years. A gradual increase of NIS 500 will take place over the next year, with the possibility of another increment in 2007, to be determined later. Olmert was adamant at the start of the negotiations that such a raise would be impossible.



Labor MK Matan Vilnai insisted Wednesday that only the party’s arbitration board has the right to choose nominations for ministerial positions. Vilnai heads a faction which opposes the way Peretz has carried out negotiations with Kadima. Emphasizing his position, Vilnai said he would rather serve as a “balancing force within the Labor party as opposition."



Kadima and the Pensioners have agreed to a near-merger, thus giving Kadima the equivalent of 36 MKs. The Pensioners will have voting rights at Kadima faction meetings, and will hold independent meetings only on matters specifically concerning elder citizens. The party, which had never been represented in the Knesset before, shocked the entire country by receiving seven Knesset seats - largely a result of a protest vote by young and/or disenfranchised voters.



Yisrael Beiteinu party Chairman Avigdor Leiberman appears to be headed for the opposition at this point. In a last-ditch effort to convince Olmert to establish a center-right coalition that would exclude Peretz, Lieberman said, “Labor will be a weak cane for the next government to lean on.