JERUSALEM • Prime Minister Benjamin Netanyahu looked set to form the most right-wing government in Israeli history, with Mr Avigdor Lieberman, a hardliner loathed by Palestinians, expected to become defence minister.
Mr Netanyahu's aides were in talks with officials of Mr Lieberman's hawkish Yisrael Beitenu party on terms for its entry to the ruling coalition, which would boost its currently wafer-thin majority in Parliament.
Israeli Defence Minister Moshe Yaalon has resigned, charging that extremists had taken over the country after he clashed repeatedly with hardline ministers over the army's handling of Palestinian violence.
Mr Yaalon said he no longer had any trust in Mr Netanyahu after the prime minister offered his post to Mr Lieberman in a bid to expand the ruling coalition's majority.
Yisrael Beitenu held six of the 120 places in Parliament, but following news of the coalition deal, its MP, Ms Orly Levi-Abekasis, said on Facebook she was quitting the party but would retain her Knesset seat.
Even with five seats, Yisrael Beitenu's entry into government would be a major boost for Mr Netanyahu, who has not concealed his ambition to expand on the coalition's current 61 seats.
The return of Mr Lieberman, who served as foreign minister under Mr Netanyahu from 2009 to 2012 and again from 2013 to 2015, could raise international concern about his government's policies - especially regarding the conflict with the Palestinians.
As defence minister, Mr Lieberman, who himself lives in the occupied West Bank, will oversee military operations in the Palestinian territories and have a major say in policy towards the settlements.
Just a month ago, he said that if he were defence minister, he would give Hamas' Gaza leader Ismail Haniya 48 hours to hand over detained Israeli civilians and the bodies of soldiers killed in the 2014 war "or you're dead".