The coalition agreement signed Friday between Habayit Hayehudi and Likud-Yisrael Beiteinu calls for a controversial bill for a Basic Law that would make the state's democratic character subservient to its Jewish character.

Meanwhile, Prime Minister Benjamin Netanyahu officially informed President Shimon Peres that he had been successful at forming a government, after Yesh Atid and Habayit Hayehudi signed coalition agreements Friday, bringing to a close weeks of fevered negotiations. The new government is expected to be sworn in Monday.

"We will work to strengthen the security of the State of Israel and improve the quality of life for all of Israel's citizens," Netanyahu said.

According to a previous version of bill regarding Israel's character, whose legislation was halted in the last Knesset following a public outcry, the state would invest resources to promote Jewish settlement but not be similarly obligated to do so for other ethnic groups. Former Kadima MK Avi Dichter, who initiated the bill at the time, presented it in two different versions. One stated that Arabic would no longer be considered an official language, but rather would merely have a "special status." The other version presented that clause in softer wording.

Senior officials of Habayit Hayehudi did not know which of the versions presented to the previous Knesset would be brought before the new one, but they said they believed the clause about Arabic would not be included in it.

Dichter's bill was stopped by then-Kadima chairwoman Tzipi Livni after she was harshly criticized for it. However, now Livni is part of the government obliged by dint of coalition agreements to advance the bill. Livni, who is to serve as justice minister and head the Ministerial Committee on Legislation, will have a major say in whether the bill moves ahead. A senior figure in the Knesset said yesterday that the law is unlikely to pass because the ultra-Orthodox parties are not in the current coalition.

A senior judicial figure asked by Haaretz to look at the wording of the second, softer bill Dichter had proposed said: "I really don't understand the changes in the new wording of the bill. Dichter left the controversial clauses involving a change in the balance of the image of the State of Israel, and made the democratic rule subservient to the Jewish nationhood, and replaced the version he proposed with a version that even in terms of syntax is incomprehensible." The judicial figure called the second version of the bill "a mish-mash of ideas that may even be worse than the first version."

Lapid: 'I fail, Bibi fails'

The signing of the coalition agreement came only after another "small crisis" was resolved, when Habayit Hayehudi and Yesh Atid realized that Netanyahu was not going to appoint the two factions' chairmen, MKs Naftali Bennett and Yair Lapid, as his deputies. A compromise stated that the pair would receive that title, or titles of vice premier, if Netanyahu decided he would be conferring it on any coalition partner.

Lapid, responding on his Facebook page to criticism of his appointment as finance minister, said: "I know the thesis that Netanyahu offered me the ministry so I'll fail. Even someone who doesn't believe Netanyahu should know that if a finance minister fails, he takes the prime minister with him."

Bennett said on Friday: "I wish for Prime Minister Netanyahu and for all of us, the ministers of this government, to remember that we are emissaries of the public, obligated to the entire people of Israel and all the citizens of Israel."

The coalition agreements signed with Habayit Hayehudi and Yesh Atid make practically no reference to diplomatic negotiations. Netanyahu has already granted Livni broad powers in that realm; the agreement calls for the establishment of a special inner cabinet consisting of the heads of all coalition faction heads to watch over the process. Habayit Hayehudi also inserted a clause in the agreement requiring the government to move ahead within 90 days on a bill that would mandate a public referendum on any agreement involving the giving up of territory.

The agreement gives Yesh Atid five ministries (finance, education, social services, health and science and technology ) and the office of deputy minister of social services. Yesh Atid will also chair three Knesset committees - immigration and absorption, advancement of the status of women and public petitions. Habayit Hayehudi will receive three ministries - economics and commerce (whose minister will also serve as religious services minister and minister of Jerusalem affairs and the Diaspora ), housing and senior citizens. A Habayit Hayehudi legislator will also hold the office of deputy minister of religious services and deputy education minister and chair of the Knesset Finance Committee.

Yisrael Beiteinu managed to extract from the agreement at least nine key positions for its 11 Knesset members. Five of its MKs will become ministers, including Avigdor Lieberman himself as foreign minister (whose portfolio is being kept for him by Netanyahu while his trial for breach of trust is underway ), and chairmanship of the prestigious Knesset Foreign Affairs and Defense Committee. Yisrael Beiteinu will also have the agricultural portfolio, apparently to go to MK Yair Shamir; the public security ministry, which will remain in the hands of the current minister, Yitzhak Aharonovich; and tourism, which will apparently go to Uzi Landau.

Bill for universal draft on front burner

According to the agreement, the bill on the universal draft, whose wording will be appended to the agreements, will be presented to the Knesset 45 days from the establishment of the new government. It is to be put to a vote in the Knesset before the 2013 budget is presented. A special committee, formed to make sure the bill is passed on schedule, will be headed by a Yesh Atid lawmaker. Another clause in the coalition agreement calls for the presumptive education minister, Shay Piron, to formulate a plan within six months for a core curriculum that will be required in all of Israel's schools.

Habayit Hayehudi has been given broad powers with regard to religious services. Within 30 days of the new government's establishment, the Chief Rabbinate will begin operating as an associated body of the Religious Services Ministry, which will also take charge of the conversion system. Bennett will also be appointed chairman of the subcommittee in the inner economic cabinet on the cost of living and economic concentration.

Netanyahu also agreed to the demand of his new partners to establish an inner cabinet on housing, headed by Lapid, and that within 30 days the housing minister will amend criteria to give priority to working people in eligibility for home ownership under a national housing program. The finance minister will also formulate criteria as part of the new budget that will encourage people to enter the job market by linking benefits and grants to a person's status as a member of the workforce.

In a move against the ultra-Orthodox factions, the agreement also states that only after agreement in writing by all four main coalition partners can additional parties join the government. Another clause requires the new government to present to the Knesset in its first session a bill that from the next Knesset and thereafter, the cabinet will have no more than 18 ministers, no more than four deputy ministers and no ministers without portfolio.

Netanyahu is expected to announce later today which members of his own party will serve as ministers; he is not expected to dismiss any Likud ministers but will reshuffle their roles.