Israel's incoming Prime Minister Benjamin Netanyahu secured a parliamentary majority on Thursday after his Likud party said it had reached an agreement with the Jewish ultra-Orthodox Shas party.
Netanyahu's right-wing alliance won a comfortable victory in a Nov 1 election, Israel's fifth in less than four years. His partnership with far-right parties has stirred concern at home and abroad.
"We have completed another step towards the formation of a right-wing government that will act to serve all of Israel's citizens," Netanyahu said in the statement.
The agreement with Shas gives Netanyahu control over 64 of the Knesset's 120 seats, though a final coalition deal has yet to be signed.
According to the agreement, Shas leader Aryeh Deri will head the interior and health ministries during the first half of the government's term, then take up the finance ministry in the second half. Deri will also serve as deputy prime minister throughout Netanyahu's tenure.
Deri, a veteran politician, was convicted of tax fraud last year but spared jail under a plea deal. The Knesset will have to pass legislation that would enable his return to the cabinet.