Tel Aviv - Prime minister-designate Benjamin Netanyahu moved closer to forming a majority government in the Israeli parliament early Monday, signing a coalition agreement with the ultra-Orthodox Shas party overnight.

Under the agreement Shas will receive four ministries, including housing and construction. Its leader, Eli Yishai, will be interior minister. The party also secured an increase in 1.4 billion Israeli shekels (about 350 million US dollars) in child allowances, a top priority for it because many of its supporters are large religious families with many children.

Netanyahu's hardline, mainstream Likud party has already signed a coalition agreement with the ultra-nationalist Israeli Beiteinu party, under which its controversial leader, Avigdor Lieberman, will be foreign minister.

With the Likud, Israel Beiteinu and Shas, Netanyahu now has 53 of the 120 mandates in the Knesset, Israel's parliament. The former premier is also wooing the Labour Party of Defence Minister Ehud Barak, who wants to join the Netanyahu government but has sparked a serious rift within the party because more than two-thirds of its lawmakers oppose the move and demand to go into opposition. Barak wants to convene the party's convention on Tuesday to vote on the Likud proposal.

In his bid to woo Labour, Netanyahu asked Israeli President Shimon Peres for a two-week extension to form the government on Friday, after the first 28 days allocated to him under Israeli law expired.

Likud emerged second - after the centrist Kadima party of outgoing Foreign Minister Tzipi Livni - from the February
10 elections. Kadima has one mandate more than the Likud, but Netanyahu was tasked with forming the next government because the right-wing bloc has a majority in parliament. (dpa)