A last-minute crisis over titles, which held up the formation of Israel's new coalition, was resolved overnight, paving the way for Prime Minister Benjamin Netanyahu to present his new government next week, dpa reported according to Israel Radio.
The path was cleared for the parties to sign the coalition agreement later Friday after Naftali Bennett, leader of the Jewish Home faction, and Yair Lapid, head of the Yesh Atid party, agreed to forgo the title of "deputy prime minister."
Both men will hold key portfolios in the new government but on Thursday refused to complete coalition talks after Netanyahu announced he would not be appointing them as his deputies.
The deputy premier designation is largely ceremonial and carries no formal powers.
According to the radio report, Netanyahu spoke overnight with both Bennett and Lapid overnight, who agreed to give up on the titles "out of respect for the prime minister."
The row erupted Thursday as Bennett and Lapid were set to meet with a representative of Netanyahu's Likud-Beteinu alliance to iron out the final details of the coalition deal, six weeks after elections.
Netanyahu has Saturday evening to inform the president he has a government in place.
After days of deadlock he achieved a breakthrough Wednesday night after the prospective coalition partners agreed to compromise on the allocation of government portfolios.
According to Israeli media reports, the compromise sees Yesh Atid receive the coveted education portfolio but drop its demand to also hold the powerful Interior Ministry, which will instead go to Likud-Beteinu.
Yesh Atid also abandoned its demand to chair parliament's influential finance committee, which will now be held by Jewish Home.
In addition to Likud-Beteinu, Jewish Home and Yesh Atid, the mooted coalition includes the small centrist Movement faction of former foreign minister Tzipi Livni.
Between them, the parties account for 68 members of the 120-seat parliament.
If Netanyahu misses the deadline for the formation of the government President Shimon Peres can either ask another politician to try form a government or call new elections.