Israel coalition horse-trading begins

Israel\'s main political parties began intensive coalition talks on Sunday, a day after Prime Minister Benjamin Netanyahu was formally tasked with forming a new government following last month\'s election. Netanyahu, whose rightwing Likud-Beitenu list won a narrow victory with 31 of the Knesset\'s 120 seats, now has 28 days to piece together a government facing key diplomatic and foreign policy issues. High on the agenda is likely to be the soaring tensions along Israel\'s northern border after an alleged Israeli air strike on a weapons convoy in Syria, which sparked threats of revenge. It will also have to decide how to handle the issue of Iran\'s nuclear programme. Netanyahu on Sunday called on the parties to join him in forming the \"broadest possible national unity government\" to lead the country through \"a decisive period\" of its history. \"The most important mission facing a national unity government is stopping the nuclear arming of Iran,\" he told ministers in his outgoing cabinet in a move he said had been \"complicated\" by Iran\'s installation of upgraded enrichment equipment at one of its main nuclear plants.The incoming government will also have to deal renewed diplomatic pressure over the frozen peace process with the Palestinians. And it will also face pressing domestic challenges, with a larger than forecast deficit paving the way for an austerity budget likely to ignite simmering public anger over the rising cost of living. Netanyahu said there were three main tasks facing the incoming government: firstly, passing a responsible budget and bringing in reforms to lower the cost of living. Secondly, to \"significantly increase equality in sharing the burden\" of military service without dividing the nation -- a euphemism for drafting the ultra-Orthodox into the army. \"The third mission is to move forward on a responsible and realistic diplomatic process,\" he said. Netanyahu\'s negotiating team\'s first meeting was with Yesh Atid, the new centrist party headed by Yair Lapid, which stunned the political establishment by taking 19 seats and which is expected to hold a key role in government. At the conclusion of the meeting, Likud\'s spokeswoman said the sides had met \"in a relaxed and positive atmosphere.\" \"The sides presented their stances and set to meet again later in the week,\" she said in a statement. Yesh Atid did not comment on the meeting. Netanyahu\'s representatives were then meeting Naftali Bennett, whose far-right Jewish Home party won 12 seats, and later with the ultra-Orthodox Shas party (11 seats). Both parties are hoping to be part of the coalition. Talks will continue on Monday with the ultra-Orthodox United Torah Judaism (UTJ) which won 7 seats, and the two centrist parties HaTnuah and Kadima, which won six and two seats respectively. It is the domestic issues most likely to create problems for Netanyahu in his attempts to build a coalition. Yesh Atid has said its main priorities are to ensure a more equal sharing of the burden of military service, in a move likely to alienate potential partners Shas and UTJ who are adamantly opposed to drafting the ultra-Orthodox. Lapid has also said he would not sit in a government which did not engage in peace talks with the Palestinians. Although Jewish Home takes a similar line to Yesh Atid on drafting the ultra-Orthodox, the faction is opposed to the creation of a Palestinian state and by extension a renewal of peace talks. Another potential coalition partner is HaTnuah headed by former foreign minister Tzipi Livni who campaigned for renewal of peace talks with the Palestinians.