Netanyahu and Herzog close to Israeli coalition deal: Reports

Israeli Prime Minister Benjamin Netanyahu is close to agreeing a unity government with the main opposition leader, local media said on Wednesday, in a move that could help revive peace talks with the Palestinians.

The head of the right-wing Likud has reportedly been engaged in intense negotiations with Labor Party chief Isaac Herzog in recent weeks in a bid to form a government of national unity.

Herzog, whose party forms the Zionist Union along with the centrist Hatnuah, could present a possible coalition agreement to his party in the coming days, the reports said.

A member of the Knesset for the Zionist Union told the Haaretz newspaper late on Tuesday that he expected Herzog to decide to join the coalition within the next 24 hours.

"The gaps [between the sides] are shrinking," he said, adding Herzog had passed the point of no return.

Herzog's entry into the government would be closely watched by the international community for its potential impact on the moribund peace process with the Palestinians.

An advocate of an independent Palestinian state, Herzog has been touted as a potential foreign minister - a role currently assumed by Netanyahu in a temporary capacity on top of his role as premier.

Egyptian President Abdel Fattah al-Sisi on Tuesday urged Israelis and Palestinians to take historic steps to achieve peace, comments which some analysts interpreted as an attempt to boost the idea of Herzog joining the government.

If a national unity government is formed Netanyahu and Herzog could visit Egypt to launch a new peace initiative under the auspices of the Egyptian president, the Jerusalem Post cited anonymous officials from both parties as saying.

But resistance to the coalition is strong within both camps and commentators stressed an agreement was far from certain.

Herzog's main rival in the Labor Party, Shelly Yachimovich, described the possible alliance as a "blood wedding".

She promised on her Facebook page to fight for "justice, clean government, ideology, and the honour of the party".

Within Likud, several members said they would prefer an alliance with the nationalist party Israel Beiteinu rather than Labour.

The Zionist Union was formed in the run-up to the 2015 election in a bid to unseat Netanyahu but failed, with the premier later forming one of the most right-wing governments in Israel's history.

However Netanyahu's coalition has just a one-seat majority in parliament and he would benefit from wider backing - with members of the coalition currently able to hold him to ransom.