Newly-elected Kadima party chairwoman Tzipi Livni appears to be closing in on a coalition agreement with the Labor party following a midnight meeting at which major progress in negotiations was reported by both sides.
Kadima Knesset Member Tzachi HaNegbi, Labor party chairman Ehud Barak and Histadrut Labor Federation head Ofer Eini met together at Barak's house until the wee hours of Sunday morning.
Eini is expected to continue the talks later in the day with Kadima Cabinet Secretary Yisrael Maimon.
Among the issues on the table are the possibility of Barak's leading the negotiating team in talks with Syria, economic issues such as benefits for college students and senior citizens, and a demand that Livni move Justice Minister Daniel Friedmann to another post.
Although Kadima sources were optimistic that an agreement might be signed as early as this week, Labor officials said that Livni may still have to ask President Shimon Peres for a 14-day time extension, especially with the approach of the Sukkot holiday on Tuesday.
Labor expressed concern that Livni might not be able to persuade the Sephardic religious Shas party to join the government, and said it had no desire to be part of a narrow coalition. However, said Kadima sources, only after Kadima closes the deal with Labor can Livni begin to focus her efforts on Shas, the Gil Pensioners Party, Meretz and United Torah Judaism.