Tel Aviv - Negotiations over the formation of a new Israeli government have made "real progress" and a new coalition agreement between the ruling Kadima party and the Labour party could be signed in the coming days, Israel Radio reported Sunday.

Sources close to Labour Party leader, Defence Minister Ehud Barak, said the progress was achieved during a Saturday night meeting between representatives of the two parties.

A further meeting, to discuss Labour's economic demands, is slated to take place Sunday.

Newly-elected Kadima leader, Foreign Minister Tzipi Livni, was charged by President Shimon Peres with forming a new government, following the September 21 resignation of Ehud Olmert, who quit the premiership due his alleged involvement in several corruption investigations.

Livni has 28 days in which to form a new government, and is conducting talks with representatives of current coalition parties, who want the existing coalition agreements altered.

If Livni is unable to form a government within 28 days, she can ask for a 14-day extension, and if, still unsuccessful, new elections must be held within 90 days. (dpa)